Standard Life has become the first major insurer to launch of a group self invested personal pension.
The SIPP has been designed to take advantage the opportunities arising from pensions simplification and is particularly relevant to employers who are intending to review their scheme arrangements in advance of A-Day on April 6 2006.
GSIPP will offer all the features of the individual SIPP, whether being used for saving, drawdown or a combination of both. Investment options will include the range of insured funds on the Standard Life sigma platform and a choice of self-invest options such as Standard Life mutual funds, stocks and shares, discretionary fund management and commercial property investment.
Residential property will be available as an investment option from A-Day.
GSIPP, due to be launched in January 2006, will be fully integrated with Standard Life’s existing group pensions e-commerce technology, such as streamlined joining for new members and online payment methods. Online servicing will help to minimise administration for employers and advisers.
Other features of the Standard Life GSIPP will include the potential to consolidate multiple pension schemes into a single wrapper to reduce administrative burden, and a possible replacement for trust-based Group AVC schemes. It also has flexible and transparent remuneration options paid out of scheme fund for greater tax efficiency, and explicit annual management charge across the entire scheme.
All schemes are priced on a bespoke basis according to scheme size and membership. There are additional charges for self-investment but only when used by the member.
In addition, GSIPP can be set up on a similar terms to a Group Personal Pension providing scheme members select only funds from the sigma range. This option – called the group flexible retirement plan – avoids the requirement for a full SIPP advice process when the scheme is initially put in place.
This will allow GFRP to be implemented using the same streamlined joining process that is already in place for GPP and Group Stakeholder Pensions Plans.
Scheme members can be upgraded from GFRP to full SIPP if and when they are ready to take advantage of self-invest functionality. In the meantime GFRP can be managed as a conventional GPP until SIPP self-invest options are required.
Barry O’Dwyer, marketing director at Standard Life, says: “We believe GSIPP will revolutionise the corporate pensions market.
“To date, SIPPs have been the preserve of the wealthy, partly because they are the ideal vehicle to take advantage of the freedoms being introduced in April 2006. Some of these freedoms are important to all investors – the freedom to avoid buying an annuity, for example.
“Why should employees be denied access to the best product that the industry can offer? GSIPP will allow many employers to simplify and upgrade their pension arrangements, particularly those who are considering a move from a trust-based to a contract-based scheme in light of the Pensions Act 2004.”