Small Self Administered Pensions

Small Self Administered Pensions (SSAP) / Self Invested Personal Pension (SIPP)

A Small Self Administered Pension Scheme (SSAP) is an occupational pension scheme with less than 12 members. More commonly it is a single member scheme. It can be used where family members work and own a business together or for groups of company directors or for a single owner director.

The scheme is self-administered, which means that you do not buy a pension from an insurance company and you decide yourself what the pension fund will be invested in.

Under Revenue rules all SSAPS must have a Revenue approved Pensioneer Trustee. This will be a person or a company who is independent of the business and who is a professional pension trustee. This person or company will have experience in dealing with and setting up pensions.

The Revenue Approved Pensioner Trustee will be your pension administrator and together with them we can show you how to get started and will tell you what rules and regulations you need to follow.

The difference between this type of pension and any other pension is that instead of giving your money to an insurance company for them to invest, you make the investment decisions for yourself. There are some restrictions on how you can invest the money. A sample of some of those restrictions is below:

  • You can’t use the pension fund to purchase a holiday home and there are strict rules regarding the purchase of overseas property.
  • You cannot purchase shares in the company that you own or are a director of.
  • Personal items cannot be bought, for example, art, jewellery, vintage cars, yachts, etc.
  • Investments in private companies (not listed on the stock exchange) can only be a maximum of 5% of the pension’s assets and a maximum of 10% of the private company’s share capital.

A Self Invested Personal Pension (SIPP) is the personal pension version of the self administered pension scheme (the self employed and employees in non pensionable employment can avail of the SIPP). This gives the self employed individual the same opportunity to make decisions and take control over their pension scheme. Similar restrictions apply in terms of the assets that can be invested in and arms length rules etc.