Paramount Group - Pensions

Newsflash

Protecting Tax Free cash

As you generally advise your clients regarding remuneration strategy and more importantly profits extraction it appears, following research with our existing clients that, for those who hold executive/directors pension policies and even those with small self administered schemes, it is now worth a review. This would examine whether it would be advantageous to transfer the existing benefits to a section 32 or section 32A (Block transfer) and start funding a self invested personal pension. For those who have small self administered schemes it is still possible to transfer to a section 32 and have the section 32 self invested, utilising the commercial property occupied by the sponsoring employers company.

Pensions

Pensions themselves are a wrapper which provides a tax efficient environment for retirement planning. Whether the pension chosen is a SIPP (Self Invested Personal Pension), a Personal Pension or a Stakeholder Pension Paramount will help you make an informed decision on the most suitable investments for your own pension scheme. (Link to investment section)

Stakeholder Pensions

Originally introduced in 2001 by the government to encourage people to save towards retirement and ultimately reduce the burden on the state. The essence of the Stakeholder pension was an easily accessible (minimum monthly premium £20), low cost (maximum annual management charges apply), no frills product aimed at those on low and even no salary (contributions of up to £3600 pa irrespective of earnings).

Stakeholder pensions have not succeeded in the original objective of encouraging those on low salaries to save for retirement. However, they have provided areas of opportunity for higher rate taxpayers to utilise as they seek to maximise the tax breaks available. Opportunities such as commencing a pension on behalf of a non working spouse, child or grandchild, or the reinvestment of annuity income to gain further tax relief.

Self Invested Personal Pensions

The emergence of the SIPP has come about due to the necessity for the traditional pension to evolve and provide investors with a more sophisticated product. Their popularity has greatly increased with the implementation of the new ‘A Day’ pension legislation, which became law on the 6th April 2006.

A SIPP is essentially a Personal Pension contract that can diversify (Link to investment section) and outsource the investment within the pension to specialist fund managers rather than the traditional choice of Insurance Company administered funds. Essentially the antipathies of the Stakeholder pension, albeit the advent of low cost SIPP contracts has made them much more accessible to the public.

Although the Chancellor of the Exchequer reneged on his promise to allow a SIPP to invest in residential property, fine wines, classic cars, art and antiques the SIPP still offers incredible investment flexibility. From 6th April 2006 (A-Day) the permitted range of investments include:-

Commercial property
Stocks and shares (traded on a ‘recognised’ stock exchange including the AIM – Alternative Investment Market)
Overseas securities (traded on a ‘recognised’ stock exchange)
Investment trusts, Open Ended Investment Companies (OEICS) and unit trusts
Deposit accounts
Units in insurance company funds
Traded Endowment Policies
Land including farm land and forestry

Of course permission to invest in these areas may be restricted further by the scheme administrators.

The Paramount Group SIPP was introduced to offer a competitively charged, flexible SIPP for the new pensions era.
Group SIPPS and beyond.

Paramount Group offers a full range of Employee benefit packages, including life assurance and healthcare to our corporate clients, and can offer a Group SIPP arrangement for their employees giving maximum flexibility and enhancing their reputations as modern employers.