AUTO-ENROLMENT AND SSAS

AUTO ENROLMENT

• Auto enrolment is a government initiative to help people save through a pension scheme, making it compulsory for employers to automatically enrol their eligible employees into a pension scheme.

• There are 5 elements:-

• 1. Staging Date
• 2. Eligible employees
• 3. Calculating Employer contribution
• 4. Concept of a “waiting period”/deferment
• 5. Employer duties

• Provide Retirement benefits to all the employees i.e., eligible, non-eligible and entitled.

• Applies to company with at least 1 employee.

• Contribution is made by both employer and employee in specified fixed ratio.

• Employer gets the benefit of tax rebate on the pension amount.

• Pension amount cannot be used in any way by the directors/employers or the employees.

• No such loan or benefits exist.

SSAS

• The SSAS (Small Self-Administered Pension Scheme) is one of the pension schemes with exclusive qualities that make it an affective financial planning tool.

• A great scheme for family business and small partnership companies. Main elements:-

• 1. A Trust with all members as trustees.
• 2. Sponsoring Employer.
• 3. One independent trustee.

• This scheme applies only to directors/ key staff and can be extend to their relatives irrespective of their employer.

• Number of members is limited to 12.

• Contribution is made by the member or the employer.

• There is whole set of tax benefits attached to this scheme. For example – no income tax, no capital gain tax, no corporation tax. All subject to conditions.

• The pension scheme allows you to borrow the 50% of SSAP fund.

• Enables director to buy their own business assets, lend money to their own business as well as others.

• Owners enjoy the SSAP loan back benefits.