Defined Benefit  

Pension transfer advice to steelworkers faces MP scrutiny

Pension transfer advice to steelworkers faces MP scrutiny

The Work & Pensions select committee will be questioning financial advisers about the advice given to steelworkers to transfer their defined benefit (DB) pensions out of the British Steel Pension Scheme (BSPS).

A spokesperson at the committee told FTAdviser that the hearing session will take place on 13 December.

Pensions expert and founder of Pension Playpen Henry Tapper, and Al Rush, principal at Rutland-based Echelon Wealthcare, which visited Port Talbot to speak to the British Steel pension scheme members and found out that there was little evidence of financial advisers suggesting anything other than transfers to the individuals, will be at the hearing.

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Stefan Zaitschenko, a former Tata steelworker who helps run a Facebook group for members of the old scheme with 4,300 participants, will also be heard.

Mr Tapper told FTAdviser that he hopes the committee, led by Labour MP Frank Field, can look at three aspects of the current problem steelworkers are facing.

First, he expects that the committee of MPs will look at the advice the trustees were giving, and reconsider what protections members can get from their trustees, where serious disruptions with the information that they received is occurring.

Around 130,000 steelworkers will have to choose to move their defined benefit (DB) pension pots to a new plan being created, BSPS II, or stay in the current fund, which will be moved to the PPF, by 11 December.

However, it is alleged that thousands of members didn't receive all the information necessary about their pensions to be able to make an informed decision.

Secondly, Mr Tapper is advocating that "special protections should be taken by regulators to ensure factory gating and the like doesn't take place".

FTAdviser reported this week that several steelworkers appear to be transferring out their pensions after being lured by an introducer firm called Celtic Wealth Management & Financial Planning.

Several sources have said the firm has been present at several roadshows from the scheme trustees, which are attended by members wanting more clarifications about their pensions and proposing to them a flat fee of £1,500 to arrange their DB transfers.

Last, but not least, Mr Tapper will encourage the adoption of a policy of whistleblowing about financial advisers.

He said: "What is clear now is that a lot of IFAs knew and know that bad things are going on, but they are not empowered to whistle blow, and so a culture of secrecy develops, which isn't helpful."