- 1. A new way of pension planning This presentation is directed
at Professional Financial Advisers only. It should not be
distributed to or relied upon by retail clients
2. Agenda
- Pooled Investment Choices
06/11/09 3. Background: A Day Impact
- One set of rules for all registered pension schemes. Access now
viable to individual trust based personal pension schemes
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- No need for an employer contribution
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- Include members who are employees but not controlling
directors
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- Scheme pension in addition to USP / ASP
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- Non employees (e.g. spouse, children) as members
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- More than one scheme per employer
06/11/09 4. Missing Link
- Market polarised post A-Day between SSAS and Personal SIPP
- Revised interest in SSAS particularly driven by Employer loan
backs and greater investment flexibility
- Growth in personal SIPP market continuing despite FSA
focus
- Is there something that fits between a SIPP and a SSAS?
06/11/09 SIPP SSAS ? A new company: A new proposition 5. Family
SIPP
- An exciting new opportunity
- Effectively blends the best features of SSAS and Mastertrust
SIPP, plus some new features
- What it is a means for any group of like minded individuals to
be members of the same scheme and maximise investment opportunities
and retirement options available
- What it is not a means to circumvent HMRC regulations with
regard to passing on tax relieved pension savings from one
generation to another
- Really better described as anindividual trust based SIPP
06/11/09 A new company: A new proposition 6. Legal Framework
- The scheme willnotbe written under a Master Trust
- Eachfamilyorgroupwill effectively have their own scheme via an
Individual Trust Deed and Rules
- This will allow multi memberpooledSIPP schemes
06/11/09 SIPP Master Trust Many members & Assets all held
under the Master Trust Assets will be held as pooled investments
Family SIPP Family Dad Mum Kids 7. Pooled Investment Choices
- Discretionary Fund Manager (DFM)
06/11/09
- The choice of investment must comply with the Revenues rules
for authorised investments .Broadly this means quoted stocks &
shares, authorised unit trusts, investment trusts, Open Ended
Investment Companies, suitable commercial property as well as
investment funds of insurance companies.
- A designated bank account will be set-up for each Family
Suntrust scheme. All transactions are made using this account.
Interest is calculated daily on funds remaining in the account
& will be credited to the account quarterly.
8. To pool or not to pool.. 06/11/09
- Potentially enables much larger value assets to be purchased
when compared to a single SIPP
- Larger borrowing opportunities if members pool their
assets
- Contributions are deemed to be for the benefit of the member
who made them, however, potentially there may be different ways of
allocating investment growth between the members
OFFICE A SIPP B SIPP C SIPP SIPP OFFICE Contributions and
Transfer Values ABC Family SIPP 9. Pooled Fund An example case
study
- Derek Tor is 59 and he is a member of a Mastertrust SIPP.
- The major part of fund is commercial property with little if
any liquidity and maximum borrowing.
- His son and son in law in same architects business and they
have small personal pensions
- The family are interested in ideas for long term expansion of
business and an exit strategy for Dad over next 5 years
06/11/09 10. Possible solution? 06/11/09
- One pooled fund rather than 3 Mastertrust SIPPs
- Son and son in law transfer existing pensions and pay
contributions to create liquidity over next 5 years for fathers
retirement for both cash and income
- Other family members who are not in the business can also
join
- Maintenance of property in pension for long term
Son in Law Derek Tor Son Family SIPP 11. Options at
retirement
- Alternatively Secured Pension (ASP)
06/11/09 12. Scheme Pension
- A form of secured pension
- Available from individual trust based money purchase schemes as
well as DB schemes
- Individually determined pension from ring fenced fund with no
mortality cross subsidy
- Scheme Pension is calculated by reference to
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- the fund size (minimum 100,000)
-
- the age, gender and life expectancy of the individual and the
nature of the investments
-
- the other usual factors such as the likely level of charges and
payment frequency
- Potentially higher income than annuity or ASP
- 10 year fixed payment period possible
- Dependants pension can be provided from any remaining fund on
death
06/11/09 13. Scheme Pension
- It can be offered at outset when the pension commences
- Following a period of USP
- Following a period of ASP
- For surviving spouse/dependant
- Likely to be most widely used at or post age 75
06/11/09 14. 06/11/09 Income available Alternatively Secured
Pension AXA Scheme Pension Options affecting income available When
is income reviewed Fixed payment period Is payment in fixed period
following members death subject to IHT Spouses benefit Left over
funds 1. Charity payment no tax 2. Where allowed, payment out of
fund max 82% tax
- To unconnected parties within scheme no tax
- Left in general fund to pay future charges no tax
- Paid out of scheme max 73.2% tax
Health Selected by client and must be between 55% & 90% of
GAD rates for 75 year oldActuarially set, based upon age, gender,
life expectancy & yield assumptionsNone available Level or
increasing, up to 10 year fixed payment period No Yes, up to 10
year fixed payment period Not an available option within ASP No, as
payments subject to administrators discretion Annually, always
based upon 75 year old At least every 3 years actual age N/A Yes
underwriting possible at outset and reviews Yes,
(ASP/USP/Annuity/Scheme pension) from remaining fund (if any) Yes,
(ASP/USP/Annuity/Scheme pension) from remaining fund (if any) 15.
Benefits of Family SIPP
- Allows multiple members under one Trust arrangement (previously
only available for Occupational Schemes)
- Allows members to pool assets under one scheme which could be
an advantage with regard to economies of scale, administration,
investment opportunities and therefore potentially from a growth
point of view
- Allows a wider range of income options on retirement than a
traditional SIPP
- Will appeal to families, business partners, as well as
traditional SSAS / SIPP type clients
06/11/09 Charges on the Family Suntrust may be higher than for a
personal pension or a stakeholder plan . 16. Why AXA Winterthur?
AXA Winterthur: First class Heritage & Strength
-
- 29 years of looking after self-invested customers*
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- 22,000 self-invested customers with over 2.5 billion
invested**
-
- 130 dedicated staff providing knowledgeable and confident
expertise**
-
- Founder member of SIPP provider group (now the Association of
Member Directed Pension Schemes)
06/11/09 *Sun Life Assurance Society, now part of AXA, has been
involved in the self-invested pensions market since it inaugurated
its first SSAS scheme in November 1979**Figures as at April 2009
17. Summary
- Pooled Investment Choices
06/11/09 This presentation is a very high level introduction to
the Family Suntrust proposition and a recommendation to invest
should not be made on the basis of this presentation alone. 18.
Important Information 06/11/09
- The minimum joint initial investment is 200,000.
- Charges may be higher than for a personal pension or
stakeholder plan.
- For Scheme Pension its worth noting that a clients future
pension income is not guaranteed. There is a risk that investment
performance could be poorer than expected or actual life expectancy
is better than assumed meaning income from Scheme Pension could
reduce or stop all together.
- The value of investments can fall as well as rise and is not
guaranteed this means that your clients could get back less than
they invest.
- Please remember that there could be a delay when selling
commercial property.
- Full details of our range of products and services are
available on request
- The information contained within this presentation is based on
our understanding of present law and HM Revenue and Customs
practice, which may be subject to change. The value of any tax
benefits depends on individual circumstances.
- The address for written communication is AXA, PO Box 1810,
Bristol, BS99 5SN.
- The telephone number of AXA is 0117 989 9000.
- AXA is a worldwide insurance group.
- This product is provided by AXA Sun Life plc.The AXA Winterthur
Wealth Management proposition is offered by companies within the
AXA UK group of companies which includes AXA Sun Life plc. AXA Sun
Life Services plc distributes financial products for this
proposition and is issuing thisitem. AXA Sun Life Services plc is
authorised and regulated by the Financial Services Authority and is
a company limited by shares, registered in England No. 3424940,
registered office: 5 Old Broad Street, London, EC2N 1AD. As part of
our commitment to quality service, telephone calls may be
recorded.