How we work closely with Financial Advisers (Part 2)

A Financial Adviser had a client with insured pension arrangements of various amounts, including an arrangement with guaranteed annuity rates. The client wished to use his pension arrangements to purchase a commercial property that was owned by the sponsoring employer. Not surprisingly the Financial Adviser did not want to lose the valuable guaranteed annuity rates that were a feature of his largest pension arrangement.

We worked with the Financial Adviser and set up a SSAS

A SSAS was set up with the sponsoring employer making a contribution. All but one of the insured arrangements were surrendered into the SSAS and the largest arrangement with guaranteed annuity rates was assigned to the SSAS. The purpose of assignment was that it became a scheme asset but retained the guaranteed annuity rates.

The property was purchased with assistance of a mortgage. The mortgage could be justified due to the total scheme assets including the assigned policy. A lease was entered into between the trustees of the SSAS and the principal employer with a commercial rent being paid. The mortgage was repaid within 6 years.

Rent was subsequently accumulated to provide liquid assets. The client was able to make full use of the guaranteed annuity rates in the insured policy that had been assigned as no part of this asset had to be commuted to provide a lump sum at age 65 – this came from the accumulated cash fund.

A positive outcome for all parties

The client was very happy that he retained full use of the guaranteed annuity rates as well as purchasing the commercial property. The Financial Adviser continued to give advice on the client’s personal and scheme investments as cash accumulated in the scheme from rental income.

At PML we aim to deliver excellence in Small Self Administered Schemes. If you would like to see if we can do for you or your client, please contact us for an initial, no commitment, chat.

  • SSAS and Legal Entity IdentifiersWhat are Legal Entity Identifiers and Does Your SSAS Need One? From 3rd January 2018 it will be a requirement for legal entities and structures to obtain a reference called a Legal Entity Identifier (LEI) from the London Stock Exchange in order for the trustees of a SSAS to carry on investing. This» Read More
  • Mr A.W.PML has been my pension adviser for many years. PML are helpful, approachable and knowledgeable.