Labour MP Nick Smith has warned the Parliament of a potential “steelworkers’ pension scandal” in the British Steel Pension Scheme (BSPS).
Speaking yesterday at a debate at the House of Commons, Mr Smith, MP for Blaenau Gwent in Wales, argued that his “constituents are worried about making the wrong decision on pension transfers”.
The Tata steelworks at the centre of the issue is in nearby Port Talbot. It is one of biggest steelworks in the world, and currently employs an estimated 10 per cent of the town's population.
Steelworkers have until 22 December to decide whether 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 Pension Protection Fund (PPF).
The failed scheme has about 130,000 members of which 43,000 are deferred, which means transferring out of their pension is an option for them.
It is alleged that thousands of members did not receive all the information necessary about their pensions to be able to make an informed decision on the matter.
More than a hundred of complaints have already landed with the Pensions Ombudsman about the scheme.
FTAdviser reported in November that several steelworkers appeared to be transferring out their pensions after being lured by cheap deals by unregulated introducer firm Celtic Wealth Management & Financial Planning, which then referred the clients to advice firm Active Wealth.
Mr Smith said: “The Financial Conduct Authority is providing insufficient support to steelworkers at this crucial time.
“May we have a ministerial statement and an action plan from the FCA to support steelworkers who are trying to do the right thing for their families?”
Andrea Leadsom, minister of state at the Department of Energy and Climate Change and leader of the House of Commons, replied to Mr Smith.
She said: “Pensions are a complex subject, and anybody trying to make decisions needs the right advice.
“The hon. Gentleman is right to raise the issue and I encourage him to seek further guidance from the FCA so that he can provide support to his constituents.”
The regulator has been speaking to financial advisers in Wales, amid an ongoing programme of “visiting advisers in the Swansea area and Port Talbot area, reminding them that there are requirements” when advising clients to transfer their pension pots.
More than 7,000 members of the scheme have requested a transfer value quotation between April and September this year, with more than 700 requests totalling more than £200m being concluded or processed during that period.
maria.espadinha@ft.com
