What is the maximum loanback that can be paid from an EPP Scheme?
The maximum loanback to the employer or an associated employer is 25% of the value of the scheme assets less any transfer values or assignments paid in to the scheme in the first two scheme years. This amount then increases to 50% including transfer values and assignments after two years. Any amount of the fund which is notionally underpinning the benefits of a retired member or prospective widow or widower for whom annuity purchase has been deferred and any sums borrowed by trustees or other outstanding liabilities may not be included in the calculation. Only policies taken out solely to secure benefits for a controlling director are suitable for this purpose, and accordingly EPPs and SSAS arrangements tend to be those that offer a loanback facility.
