An occupational or ‘company’ pension scheme is a
scheme established by an employer to provide pension benefits to
one or more individuals in respect of their service as employees.
In some cases the scheme is administered by trustees who are also
responsible for managing the investments. In other cases the
trustees pay the contributions to an insurance company and it
manages the scheme and invests the contributions.
In the case of such a scheme the individual employee’s
rights are contained in scheme rules rather than in a policy or
annuity contract.
In cases where the scheme is administered by an insurance
company, one or more policies may be issued evidencing the
individual employee’s entitlement. These policies will be
issued to the trustees and belong to them. This will be clear from
the policy schedule which will show the trustees as owners of the
policy. The trustees will then pay the proceeds of the policies
according to the terms of the Scheme Rules.
A Small Self Administered Scheme (SSAS) is a type of
occupational scheme which is subject to individual approval by
HMRC. The scheme has less than 12 active members, only one SSAS is
permitted for each employer and some or all of the income and other
assets can be invested otherwise than in insurance policies. This
means that the members who are required to be trustees of the
scheme can control the investments subject only to HMRC
restrictions which apply to all pension schemes regarding which
assets are considered to be suitable investment areas for pension
arrangements.
There is some further information on the IHT consequences of
some specific matters (
IHTM17131) in relation to occupational
pensions later on in this section.
