Common Investment Funds and pensions
Common Investment Funds and pensions

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Common Investment Funds and pensions
  • Common Investment funds: an overview
  • When are CIFs used?
  • Access to double tax treaties
  • Additional tax considerations
  • Common Reporting Standard (CRS)
  • Stamp taxes
  • Legal considerations
  • Alternatives to the CIF

Contributed by Katherine Worraker, Ian Ahkong, James Panayi and Alex Beattie of Deloitte LLP.

UK registered pension schemes operated by a single employer or group of associated employers are able to pool their investments together in a common investment fund (CIF). This can provide benefits such as economies of scale and access to investments that smaller funds may not have on an individual basis. This diversification of investment can help each scheme invested in a CIF to spread investment risk.

The trustees of a pension fund can choose to what extent they invest the schemes assets in a CIF, or decide instead to keep its assets outside of the CIF and invest elsewhere. There are a number of legal and tax considerations to take into account if a CIF is being considered, although these should not be a barrier to their use.

The purpose of this Practice Note is to discuss:

  1. when a CIF might be used

  2. the key issues to consider, and

  3. the pros and cons compared to other alternatives

Common Investment funds: an overview

CIFs are defined under section 235 of the Financial Services and Markets Act 2000 (FSMA 2000). A CIF is established in the UK under a trust deed and is an example of a collective investment scheme.

A CIF cannot be a registered pension scheme in its own right,