Firms that may be reluctant to make a pension contribution now due to future cash flow fears can make a contribution and borrow 50 per cent of total scheme assets back immediately.
Ssas and loan backs still have a place in good pension planning for sound companies. They have been poorly marketed in recent years as a way to simply raise cash that wasn’t really required or to prop up a failing company.
Article continues after advert
As with all pension planning, the purpose of the pension is to provide an income in retirement, so if the loan is bad planning for the pension it shouldn’t be considered.
Claire Trott is head of pensions strategy at Technical Connection
Page 4 of 4
