Corporate
SIPPs
This is a new
concept legislated for in the 2004 Act which defines a Corporate
Scheme that can be administered at both company and individual
level. The attractions to an employer will be the set up
and administration costs, which are likely to be much cheaper
than any of the available alternatives, and the fact that
each individual member will be responsible for his own investments.
This takes away from the employer the responsibility for
the funding of a Final Salary Scheme or the performance
of an insured Money Purchase Scheme, where the employer
may have recommended this.
There can be the usual investment flexibility associated
with SIPPS, but the Corporate SIPP can cope with a different
investment profile for each member, if necessary. Typically
though, it is likely that there would be a different level
of investment choices for directors, management and staff.
This is up to each company to decide. It could well be worth
the Company paying for each employee to receive say 1 or
2 hours advice from an IFA each year.
A further advantage to the employer is that company pension
contributions can be so structured as to be paid in line
with cashflow. For example, a company whose cashflow is
seasonal, like a retailer, could arrange for one annual
contribution rather than twelve monthly contributions. This
would need to be agreed in advance with the scheme members.
We have
a number of leaflets about Corporate SIPPS
