Simplifying the movement of assets into a SIPP will be crucial to the success of corporate platforms, Friends Life argues today.
The company is calling on the government to change the intricate legislation that governs in-specie contributions, and allow employee's benefits to be transferred more easily through corporate platforms.
Friends Life argue that current HMRC rules - which only allow some in-specie contributions into a SIPP - act to discourage pension saving. The provider believes relaxing current rules will encourage employees to pass benefits such as share incentive plans over into tax wrappers.
Dan Hawkins, Corporate Platform Proposition Manager, Friends Life said:
"Removing some of the strict criteria around in-specie contributions outside of maturing sharesave arrangements into a pension would be a simple, yet profoundly important, step towards realising the government's ambition to ignite long-term savings.
"The industry accepted solution of creating an irrevocable debt then receiving settlement of that debt in shares or units is cumbersome, costly and difficult to administer for all concerned."
Financial Secretary to the Treasury Mark Hoban recently signaled government support for new savings models such as corporate platforms. Friends Life believes platforms are the ideal environment to bolster long-term saving, and their unique ability to hold a range of benefits in one place has clear benefits.
Dan Hawkins continued:
"Platforms are more than the sum of its parts; to maximise their potential the range of benefits should be allowed to work together as much as possible. For example, moving maturing share holdings into an ISA, and later a pension, not only has tax advantages, but allows benefits to pass fluidly from one product to another in a way that encourages long-term saving.
"Reviewing the legislation to make it possible for individuals to make direct contributions to a pension - in the form of investments in addition to cash - should be the first step in bringing this ambition to life."
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