Concerns FCA protection of British Steel scheme members ‘grossly inadequate’

Work and pensions select committee chair Frank Field

An influential Government committee has written to the FCA outlining its concerns that the regulator’s protection of British Steel Pension Scheme members remains ‘grossly inadequate’.

In a 15 December letter to FCA supervision director Megan Butler, work and pensions committee chair Frank Field says it is apparent there are “insufficient protections” in place to prevent scheme members from transferring their pots against their best interest.

In the letter, Field asks Butler if the FCA has considered suspending all DB transfer advice while reparative action is taken. He asks if such a move has been discussed with the Government.

He also asks about the role of introducers and if the FCA is confident its qualification threshold for giving DB transfer advice is is adequate.

The committee held an evidence session last week where Butler spoke about the FCA’s work related to British Steel.

Six firms have stopped giving DB transfer advice following the FCA’s British Steel work: Active Wealth, Pembrokeshire Mortgage Centre Limited, Mansion Park, Vintage Investment Services, Retirement & Pension Planning Services and West Wales Financial Services.

St James’s Place also announced last week it would not take on new transfer requests from British Steel scheme members.

In the letter Field says: “While the action the FCA has taken to protect members of the British Steel Pension Scheme is of course welcome, I am concerned that it remains grossly inadequate.”

He adds: “While the protection of requiring those with rights worth over £30,000 to take financial advice before transferring is helpful in theory, it is useless in practice if that advice is shoddy or just plain crooked.”

In the letter Field also questions Butler about the FCA register, asking if the FCA will make it “far clearer” when a company is suspended from certain activities. He also asked why the FCA would not publicise suspensions from the register.

Field also asks if a change in legislation to allow firms to be suspended pending further investigation would help the FCA carry out its work.

British Steel Pension Scheme members have until 22 December to decide what to do with their pension following the separation of Tata Steel UK from the British Steel Pension Scheme. The two main options are to move with the current scheme into the Pension Protection Fund or switch to the new British Steel Pension Scheme.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Seems to be a recurring theme…. the FCA is “grossly inadequate”

    Warning to the FCA…. yes, you can longer point the finger at the children for your incompetence as a parent ….

    Mind you, I think the TPR need to shoulder some blame at this fiasco? the time line is a bit short from the employer for people to make such an “important” decision …22nd December ?

    With this in mind ( I am sure the powers that be, must have been notified of this date,the FCA and TPR should (for ….. sake I did) have seen the the red warning signs that the vultures would be circling ?

    Now we have a situation from the FCA…. oh crap the horse has got loose ….AGAIN !!!!…. and god has just walked in look busy !!!!

    There will come a time Megan, that the industries clients will stop bailing you (FCA) out time and time again (through the FSCS) which I am sure it will fall on.

    Time for the FCA to be honest with themselves and the public they are just not upto the task, and all the gold in Christendom, cannot help them

  2. Does Frank Field want to stop DB transfers for BSPS, or all DB transfers.

    What reparative work is he talking about, and he long will this take.

    Sounds like kicking all DB transfers into the long grass.

    Also if firms were suspended pending investigation, and their names published, how many will fold, either during the investigation or subsequently.

    Mud sticks.

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