Martin Tilley

Martin Tilley
Chief Operating Officer

In his latest article for Sipps Professional, Martin Tilley looks at the decision-making process and the need for documentation as it applies to Small Self-Administered Schemes.


It is often quoted: “If it isn’t written down, it didn’t happen”. While there is some debate about the legality of this statement, as far as pension scheme administration is concerned, it certainly stands up to scrutiny and if nothing else should be accepted as good practice.

Small Self-Administered Schemes (SSAS) are occupational arrangements and more often than not, are multi member.

To qualify for several administrative and legal exemptions, all members of a SSAS should be trustees and the decision-making process should be unanimous.

Unlike large occupational schemes where lay trustees are actively encouraged to undergo education and training, this is almost exclusively ignored with small schemes, with the reliance placed on any SSAS practitioner to cover all the technicalities required. This is surprising bearing in mind that the responsibility of scheme administration, laid down within the scheme’s governing deeds and rules, will likely lay squarely with trustees.

Such is the market for SSAS professional services, propositions can be found from a few hundred pounds annually moving upwards to several thousand pounds. As is true in most walks of life, you get what you pay for.

SSAS clients and their advisers would be wise to assess exactly what service they are receiving and paying for, and to make sure that the scheme is accurately and properly documented, to hopefully avoid any potential future confusion or disagreements.

Examples of good practice would include:

  • Documented and signed trustee meetings minutes
  • Signed trustee resolutions
  • Benefit Commencement statements
  • Annual member statements and allocations
  • Annual BCE statements

As a SSAS professional, I am often questioned on the need for documentation. Often the documentation produced is questioned as overkill on what is a “straightforward family scheme”. However, seasoned SSAS administrators will recognise that today’s straightforward family scheme can become tomorrow’s administrative nightmare when members of that family fall out – which is all too common. Where membership extends beyond family, there is even more reason for documentation to be kept up to date.

A common assumption is that certain assets “belong” to certain members. This is of course possible if those assets have been earmarked, but any earmarking should be documented at outset with written acknowledgement of all member trustees and endorsed by annual member allocation statements.

Many practitioners may also make the mistake of dealing with a single lead trustee. This is not uncommon and can provide for the smooth operation of a SSAS. But caution must be taken that the lead trustee may not necessarily be providing the views of, and cannot speak for, all trustees unless documented and delegated to do so. Similarly, in terms of allocating corporate contributions, this should be confirmed in writing by the company each and every time a contribution is made.

In the same way that a stitch in time saves nine, a properly documented scheme will avoid potentially time consuming and costly dispute resolution in the future.

Such disputes often turn into complaints and if unresolved through the scheme, can only be referred onwards to The Pensions Ombudsman (TPO). The TPO’s view will be based on the evidence provided, which if not documented will certainly not lead to an early resolution.

Bearing in mind there is currently a backlog approaching two years for TPO cases to be allocated to a case manager, any resolution using this method will certainly not be speedy.