Which statement about a Small Self-Administered Pension Scheme (SSAPS) is supported by the material?

Which statement about a Small Self-Administered Pension Scheme (SSAPS) is supported by the material?

• A. It can be established for one member
• B. It cannot borrow funds
• C. It is always a defined benefit scheme
• D. It requires government approval to operate

Answer: (A)

Small Self-Administered Pension Schemes are flexible, self-administered retirement plans used by a small number of members. They’re designed to be run by trustees who are often connected to a small business, giving the member or members direct influence over how the funds are invested. The statement that a SSAPS can be established for one member is consistent with this setup. A one-member SSAS is permissible and is a common way for a sole business owner to shelter funds within a pension while retaining control through the trusteeship. In contrast, these schemes can borrow to fund investments, so the idea that they cannot borrow is inaccurate. They are typically defined contribution arrangements rather than defined benefit, so claiming they are always a defined benefit plan isn’t correct. And while they are regulated and must comply with pension rules, they don’t require a separate government license to operate in the sense of a general approval process; they must be established and run in line with scheme rules and tax/registration requirements.

Small Self-Administered Pension Schemes are flexible, self-administered retirement plans used by a small number of members. They’re designed to be run by trustees who are often connected to a small business, giving the member or members direct influence over how the funds are invested.

The statement that a SSAPS can be established for one member is consistent with this setup. A one-member SSAS is permissible and is a common way for a sole business owner to shelter funds within a pension while retaining control through the trusteeship.

In contrast, these schemes can borrow to fund investments, so the idea that they cannot borrow is inaccurate. They are typically defined contribution arrangements rather than defined benefit, so claiming they are always a defined benefit plan isn’t correct. And while they are regulated and must comply with pension rules, they don’t require a separate government license to operate in the sense of a general approval process; they must be established and run in line with scheme rules and tax/registration requirements.