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DB transfers review criticises FCA register and Unbiased

The FCA’s website and Unbiased have been criticised as unhelpful in a major review of the communications received by members of British Steel Pension Scheme

The review, commissioned by the Pensions Regulator and led by former Money Advice Service boss chief executive Caroline Rookes has been published today.

It looks into communications and support provided to BSPS members during the “time to choose” exercise that ran from October 2017 until January 2018.

During the exercise the old scheme’s roughly 130,000 members were asked to decide if they wanted to stay in the old BSPS, which entered the Pension Protection Fund in March 2018, move into a new workplace plan or transfer out.

The report proposes a number of recommendations for the regulatory and consumer bodies to help savers make the right decision about whether to transfer their pension pots from a defined benefit scheme.

The review points out it would have been helpful if the trustees had compiled a list of advisers willing and able to take on pensions transfer advice for the BSPS members.

But instead it says: “Members were referred to Unbiased or the FCA website. The former is not unbiased and the latter is not easy to use, nor does it make clear if the particular firm of advisers deal with DB transfers. It also includes advisers under investigation.”

The report points out there was very little communication between the different regulators about what was happening at British Steel and says they should work more closely to share data in the future:

“During transfer exercises the regulatory bodies [TPR, FCA and the Single Financial Guidance Body] should operate in a more collaborative way with each other and with the wider partners (eg the communications agency) to ensure there is a joined up approach to supporting members through the process,” it states.

FCA director of supervision Megan Butler says: “We welcome the recommendations put forward by Caroline following what has been a comprehensive review. The report is an honest, impartial account of what was a difficult and sensitive situation.

“The FCA stands by the action it took in those challenging times but, as with every case where we have had to intervene, there are always important lessons to be learnt.”

TPR chief executive Lesley Titcomb adds: “We welcome the report which acknowledges the good outcome secured for members through an innovative restructure of the pension scheme which we approved.

“The arrangement led to a £550m cash contribution to the BSPS and brought certainty for around 125,000 scheme members. It was a strong outcome because the vast majority of members made an active choice with most opting into the new scheme.

“We are grateful to Caroline Rookes for identifying a number of useful themes in her review which will help ensure pension savers are less likely to make transfer choices which are not in their best interests. We will now work together with trustees and the government so that we can all address the review’s recommendations.”

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. There are always ‘lessons to be learnt’ – after the event!

  2. One only has to look at the paragraph at the beginning of this article

    “It looks into communications and support provided to BSPS members during the “time to choose” exercise that ran from October 2017 until January 2018.”

    2, 3, or even 4 months for 130,000 members to get good clear advice ….. the TPR and the FCA should have been all over this like a rash, it would be abundantly obvious the “fill your boots PDQ brigade” would be on to this faster than cat on a mouse.

    And so it came to pass…..costing the industries clients millions

    I really don’t think Butlers or Titcombe’s response comes across as very sincere at all…..which says it all really

    Act in haste repent at leisure

  3. The FCA Register is certainly lacking.NOt exactly designed for ease of use by the public and short on what is important – independent or not.

    Unbiased? They should be taken to task under the Trades Description Act. Hardly unbiased at all if the have anything other than Independents.

  4. Rebecca Aldridge 22nd January 2019 at 4:44 pm

    We could never have had enough pension transfer specialists available to serve 130,000 people, face to face, in what was probably realistically a 2 month time frame. It takes a few weeks to book meetings, gather information and get paperwork to the right people which takes time off the window at both ends.

    But the sudden pressure on transfer specialists could, and should, have been foreseen by the scheme trustees.

    If there had been a collaboration with a number of suitable advice firms, they could have agreed fixed fees, allowed the advice firms to be well versed in the scheme rules and have people on the ground to give, and process, the advice. An approved list of companies would have helped the scheme members at a time of huge pressure and panic. A time frame of more than three months would also have helped greatly.

    The responsibility for the panic has to be partly with the scheme trustees. And we have to learn from the experience to make sure this doesn’t happen again.

  5. FCA and Unbiased criticised, shock, horror, join the Club.

  6. Like the FCA itself, the website is unfit for purpose.
    The timescale imposed by the trustees was unrealistic and impossible.
    The whole issue was rushed in a bid to save the jobs and steelworks.
    Made a complete joke of the regulators!

  7. Nothing like passing the buck on the utter failure of the trustee’s of the scheme and the TPR.

    130,000 people potentially needing advice in the space of at most 2 months.

    Even if you assume a really good PTS could deal with 3 clients a week, that means at most any PTA worth their salt could advice 24 clients in the time frame involved, if they did nothing else.

    With 130,000 clients that means you would need 5417 pension transfer specialists who were prepared to dedictae 2 whole months to nothing but British Steel pension members.

    I would virtually guarantee there aren;t that many PTS’s in the whole of the UK.

    Yet somehow this utter failure to do even basic math by the trustee’s and the TPR is being totally ignored by all the commenters and powers that be…

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