Origen launches partnership pension scheme

Leading IFA Origen is launching a Partnership Pension Scheme (PPS), which will enable the employees of its corporate clients to take advantage of new pension rules, allowing them to transfer shares received from employer share incentive schemes into their pensions.

The new rules mean employees can make ‘in specie’ transfers from their ‘partnership share schemes’, which are HM Revenue & Customs approved savings plans where employees purchase shares in their company from their gross pay. After 5 years, any growth in the share value is free from CGT and dividends are received free of income tax. After the 5th anniversary, a member may elect to sell their shares or they can be re-registered in the employee’s name.

Pension legislation now allows individuals to make ‘in specie’ pension contributions by transferring a personal asset into a pension fund. What this means is that when the shares are re-registered after five years, they could then be transferred into his/her pension fund as a contribution, which in turn would qualify for full tax relief.

Claire Court, Head of Self Administered Pensions, Origen, said: “Our PPS works through the framework of a group SIPP. On the fifth anniversary of the share save scheme an employer is now able to offer a third option, along with inviting the employee to sell his shares or re-register the shares in his/her name. Now the employee can pay an in specie contribution into the group SIPP by transferring some or all of the company shares he has received. The SIPP will reclaim the basic rate tax relief and this will be added to the employee’s fund. It is then down to the employee to claim the higher rate tax relief via his tax return.

“The benefits for an employer running a PPS is that it will help the employee build up his retirement savings, it is administered simply as the contributions will be paid at the same time for all employees, and competitive terms can be negotiated for the group.”