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The Trustee Investment Plan (TIP) has been designed to help trustees of registered pension schemes to increase their investment over the medium to long term, subject to a maximum term of 60 years. Investments into a Trustee Investment Plan can be made at any time by trustees of a:
• Self Invested Personal Pension (SIPP)
• Small Self Administered Scheme (SSAS)
• Final Salary Occupational Pension Scheme
The Plan allows for both single and regular premium investments. The first (single premium) investment must be of £15,000 or more. The Plan also allows for regular premium investments to be made at outset or added at a later date.
The Plan has been created in a way that allows trustees to make choices that are most appropriate to the investment needs of the scheme beneficiaries. It offers high levels of flexibility, allowing trustees to withdraw money without charges on a regular or occasional basis and to add additional single premium investments or regular premium investments on a monthly, quarterly, half yearly or yearly basis.
There are two different options available under the Plan, one of which must be selected at outset and cannot be changed.
Option 1 – nil administration charge
This is designed for trustees who primarily remunerate their financial advisers by paying a fee. The Plan has a 100% allocation rate for all single and regular premium investments. If trustees wish to use this option to remunerate their financial adviser then the allocation rate will be reduced by 1% for every 1% of initial commission.
Option 2 – administration charge
Option 2 is designed for trustees who are looking for higher allocation rates. The maximum allocation rate is 112.5%. The Plan has an administration charge which is deducted monthly from each investment over the first five years. The amount of the charge depends on the level of your investment, the allocation rate and also the initial commission. When the total investment amount exceeds £50,000 and £300,000 then all future premiums will have an additional 1.0% and 1.5%* allocation respectively.
* This figure includes an additional 0.5% which will only be added if the allocation rate above 100% plus the initial commission taken is greater than 4%. For example, an allocation rate of 102% plus initial commission of 3% gives a value of 5%; this is above the 4% threshold and the investment will qualify for the additional 0.5%. An allocation rate of 102% plus initial commission of 2% gives a value of 4%; this is not above the 4% threshold and therefore the investment will not qualify for the additional 0.5%.
Both options:
• offer an extensive range of funds including multi manager, giving access to carefully selected, skilled internal and external investment managers.
• allow for investments in up to 10 funds at any one time. Subsequent premiums can be invested in up to 10 different funds per premium.
• phased investment service to enable them automatically move money gradually from one group of funds to another over a defined period of time (available only for single premium investments); no extra charges apply.
• provide unlimited free fund switches.
• allow trustees to delegate the ongoing management of the funds to their financial adviser (i.e. assuming the adviser has the correct FSA permissions).
• allow trustees to regularly withdraw money from the Plan without charge.
• Withdrawals can be targeted at one or more funds whilst leaving others untouched or spread across all of the chosen funds.
• Maximum of 10% of the premium per year. These can be taken monthly, quarterly, half yearly or yearly.
• allow trustees to make both single and regular premium investments at outset or at a later date (to the same policy). When determining the allocation rate for each ‘top-ups’ we will take into account the total premium received to date.
• give the trustees total control over their regular premium investments and they can:
• increase the level of regular premium investments
• decrease the level of regular premium investments
• change the regular premium investment frequency
• take premium holidays at anytime
Additionally we can offer trustees:
• the facility of converting existing stocks and shares into the Plan using our Share Exchange Scheme.
We can offer advisers a fully flexible structure to meet their clients’ specific requirements including:
• a structure that lets advisers select their own commission and charges
• a choice of initial commission up to 7% of premium
• trail commission from 0% to 1% per year (in increments of 0.25%) is paid monthly and can be stopped, started and varied at anytime
• a nil administration charge (i.e. nil initial commission) option for advisers working on a fee paying basis.
Past performance is not a guide for the future. The value of units can fall as well as rise. Currency fluctuations can also affect performance. Option 2 (administration charge) if full surrender occurs within the first five years of the investment we will deduct any outstanding administration charges.
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