Hundreds of IFAs have been left in limbo unable to close their pension
review cases because a PIA loss-calculation blunder remains unresolved.
The ABI-backed Pension Advisers Support Scheme, which assists IFAs through
the review, has instructed 162 IFA firms to put their cases on hold since
the FSA announced it would be amending the formula on calculating redress.
IFAs face a delay at least until the summer because the regulator is
conducting research to check that the new formula is failsafe.
The formula relates to loss calculations for some transfers in phase two
of the pension review.
Pass has received calls to its helpdesk from more than 100 IFAs asking for
clarification after they were left in the dark about what to do about
Their confusion has been compounded by a phrase in one of the FSA
bulletins, which the regulator has had to explain to actuaries in a letter
which went out on April 7.
The FSA says one-fifth of transfer cases could be materially affected by
the miscalculations which arose from guidance on how firms should adjust
for the change in an investor's Serps entitlement after a pension transfer.
Pass review manager Derek Warner says: “The impact of bulletins 7 and 8 is
to hold back cases that could otherwise move forward to completion and
FSA spokeswoman Sarah Modlock says: “It is certainly true that there is a
hold-up in a certain category of case.”