Both these arrangements are geared towards the owner director of a limited company. It would be expected that pension contributions would be towards the higher end of the scale.
A self administered pension scheme, similar to a self directed pension plan, allows the beneficiary of the pension to take complete control of his/her pension investment decisions. The difference with a self administered scheme is that a pension provider such as an insurance company, is not used for the provision of the pension structure.
Instead, a pension trust is set up and administered by the appointed trustees. One of the trustees must be a pensioneer trustee, who is revenue approved. On top of the normal duties of a trustee, the pensioneer trustee ensures that the trust operates in line with revenue rules and relevant pension legislation. The pensioneer trustee will administer the pension and ensure returns are made to revenue when required.
Investment flexibility is a key characteristic of both SSAP’s and Self-directed pension arrangements.
The managed fund choice under a SSAP may be greater than that of a Self-directed arrangement, however the SSAP may have to bear the cost of an insured contract to access managed funds, and this is on top of the administration charges applied by the pensioner trustee. In this instance the client is being hit with additional charges to access funds he/she could have access through a Self-directed pension arrangement.
Direct property acquisition is possible under both structures. Due to taxation reasons properties outside of Ireland and the UK are not advisable for pension structures. This is due to the fact that most double tax agreements held between Ireland and other countries do not strongly recognise the tax exempt status of pension structures.
Direct share dealing and bank deposits are common to both structures. Typically the share dealing costs through the Self-directed arrangements are more efficient, as the life company secures lower trading costs due to a larger volume of business.