FSA steps up supervision of DB pension transfers

At the end of last year, the FSA highlighted the complexity of conducting DB pension transfer business on a direct offer basis. This is where members of DB occupational pension schemes receive promotional information packs encouraging them to transfer out without advice.

The regulator said such a decision was likely to be too complex for a consumer without specialist knowledge to make, and it would be very difficult for promotional material to fully explain the risks.

However, the FSA has recently become aware of a number of firms that are either involved in conducting transfers, or considering transfers, in this way.

It has stressed its belief that it is very difficult to produce a direct offer pack for a DB pension transfer that is fair, clear and not misleading.

In a statement the FSA said it would enhance its supervisory scrutiny of these activities and enforcement action would be considered where failings are identified.