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The Small Self Administered Scheme fund is pooled, ( non earmarked ).
This means that while total contributions are a function of the combined limits open to the members, once invested the Small Self Administered Scheme fund can be divided in any way that ALL members agree upon. ( Subject to benefits falling within Inland Revenue limits ).
The implication is that if someone wants to retire, but his fund will not provide a good enough pension, then the other members, if they want to get rid of him, can let him have their share of the fund to enhance his benefits. ( Perhaps in exchange for some or all of his shares ).
The other members are assuming that they will make up the shortfall over the coming years.
In this manner the SSAS helps enable a retiring older generation to leave the business without imposing a cash flow problem on the younger generation, or being forced to sell to an outsider to raise retirement moneys.
In the above example the older director R has a
certain slice of the fund. However on the right is the fund divided as the Revenue see it,
i.e. not at all, therefore he can be given much more than his "fair" share
should all the other directors agree.
Many people regard their business as their pension, and with a SSAS this can be a reality.