allowable investments

•    Bank/building society accounts.

•    UK Commercial property and land.

•    Loans to sponsoring employer.

•    Insurance policies.

•    Units in a managed pension fund.

•    Unit trusts/OEICs.

•    Stock exchange investments.

•    Shares in sponsoring employer.

SPONSORING EMPLOYER

Shares

The scheme may invest in shares of the sponsoring employer – there are limits on this however. No more than 5% of the scheme’s net assets may be invested in the shares of any one sponsoring employer. Where there is more than one sponsoring employer, no more than 20% of the net assets may be invested in their shares in total (the 5% restriction still applies in relation to each individual employer).

Lending & borrowing

•             Up to 50% of the net value of the fund can be used for a loan to the sponsoring employer. The loan must be secured by way of a first charge and will have a maximum term of 5 years.

•             Scheme trustees may borrow up to 50% of the net value of the fund.

Self-investment is subject to HM Revenue & Customs (HMRC) conditions and restrictions.  The value of an investment is not guaranteed and can go down as well as up, and could fall below the amounts paid in.