Small Self Administered Schemes

The Small Self Administered Scheme (SSAS) is only suitable for the controlling directors of companies. They are established to provide benefits for directors who control the company sponsoring the scheme.

In 1973 The Finance Act made it possible for controlling directors to join occupational pension schemes.

The small self-administered scheme was created for this purpose.

Contributions paid to a SSAS are subject to the same rules as other registered pension schemes. This means there's no limit on the level of member contributions but tax relief is restricted to the higher of £3,600 or 100% of UK earnings.

Contributions made by the employer are also unlimited.

Controlling directors

A controlling director of a company is a director who, along with their family, is able to control 20% or more of the shares in the company.

It is possible for a public limited company to operate a SSAS where one or more of the members are connected. In all situations only one SSAS is permitted per company.

The directors are scheme members and often are also trustees. SSAS are subject to the usual pension scheme rules and have special requirements to ensure that the scheme is correctly run. Since 1991, for a scheme to be considered a SSAS, there must be fewer than 12 members and one or more must be a controlling director.

The Inland Revenue memorandum 109, August 1991, also adds 'a scheme is defined as self-administered if some or all of the income or other assets are invested other than in insurance policies'.

The SSAS is protected from creditors, which can be useful given as many companies are likely to experience a recession at some point during a company's life.