Do All Members Own the Benefits Inside a SSAS Equally?
The short answer is no, all members of a small self-administered scheme do not own the benefits inside the fund equally. Instead, each member’s share of the SSAS is based on transfers they have made from existing pensions, contributions they have made to the SSAS, and investment growth.
A Breakdown of Fund Ownership Inside SSAS
SSAS is an excellent pension scheme for UK business owners, allowing them to pool funds, add up to 11 members, and invest in assets such as commercial property. Here’s how the funds within a SSAS are typically distributed between members:
Share of the Fund: each member owns a percentage of the total SSAS fund. For example, if an individual has transferred their existing pension into the SSAS and made contributions that add up to 60% of the fund's value, they own a 60% share of the fund.
Receiving SSAS Benefits: the benefits an individual is permitted to draw from a SSAS depends on the value of their share at the time of withdrawal. Here’s how to withdraw SSAS funds tax efficiently.
Investment Growth or Loss: the amount a member owns within SSAS is impacted by investment growth or loss. This is because all members' funds are pooled inside SSAS and the pooled fund is used to invest in assets. So, rather than owning assets independently, you own units within the fund that can increase or decrease, proportionate to the overall fund value. Speak to our sister Company, One Crown Investments, for more insight into investing with a SSAS.
SSAS Payments: an individual’s share of the SSAS fund includes any payments, such as pension payments, lump sum payments, benefit payments, or partial transfers that are made to them. These funds remain allocated to the individual Member, whilst simultaneously forming a part of the fund as a whole.
Owning Benefits Inside SSAS: An Example
Let’s take a look at an example of benefit ownership inside a SSAS.
A husband and wife Director team own a SSAS. The husband has transferred money into the SSAS and made contributions that add up to 60% of the funds value, while the wife has transferred and made contributions of 40% of the funds value. So, you’d have a 60/40 split.
This means that any assets they invest in and any profits they may accrue from said investments will be split 60/40. It’s important to understand that split because it impacts on future benefits that may be drawn by each member.
At One Crown Pensions, we keep a strict record of member contributions inside the SSAS. We know who owns what inside the SSAS, what the benefits are, and which profits should be attributed to each member.
One Crown Pensions: Your SSAS Pension Provider
We are One Crown Pensions, one of the best SSAS Pension providers in the UK. We have been supporting our clients with SSAS for many years. If you would like to learn more about SSAS and how it works, visit our SSAS Video Hub or book a call with a member of our SSAS Practitioner team.
