Defined Benefit  

FCA pays £75k for pension transfer redress report

FCA pays £75k for pension transfer redress report

The Financial Conduct Authority (FCA) hired PWC for recommendations on how to update the calculation for the redress owed to consumers who were given unsuitable advice to transfer out of a defined benefit (DB) pension scheme.

PWC produced a report used by the regulator in its consultation document on this subject, which was published last March.

A spokesperson at the FCA confirmed the regulator paid £74,703 to PWC for this report, declining to disclose any more details on this matter.

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The regulator intends to change the methodology used for calculating redress, which was originally created to deal with the barrage of complaints from the pension review of the 1990s.

The FCA’s proposals include updating the inflation rates used to better reflect likely inflation and changing the pre-retirement discount rate so that it acknowledges the Pension Protection Fund (PPF) exists.

The post retirement discount rate is also set to be updated to acknowledge the likelihood that consumers will take a pension commencement lump sum, among other changes.

The regulator announced in August 2016 that it would review the redress methodology. The consultation on this matter closed in June and finalised guidance is expected to be published this Autumn.