The Pension Ombudsman is currently investigating over 150 complaints against the trustees of the defined benefit British Steel Pension Scheme (BSPS) about members' transfer values.
Since March and until now, the scheme has processed 2,600 pension transfers equating to a total value of £1.1bn, according to data revealed yesterday (8 February) by the scheme trustees.
In an update about its investigation, first announced in December, the Ombudsman also said that it “will shortly be undertaking another group investigation where members have complained about the "early retirement factors”.
These factors are related to the situation that, due to the nature of their work, steelworkers are allowed to retire earlier, with the minimum age retirement benefits can be paid for members leaving active service set at 55, subject to consent from the employer. If steelworkers retire from service between the ages of 55 and 64, the pension may be reduced for each year and month that the individual retires early.
Around 130,000 steelworkers had 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 would be moved to the Pension Protection Fund (PPF), by 22 December.
Of the total members, 43,000 were deferred, which meant transferring out their pension was also an option for them.
As well complaints about the transfer values being offered by the British Steel Pension Scheme trustees to members, there are also concerns the advice the pension holders are receiving to transfer out at all may be unsuitable.
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.
Several financial advice firms have stopped providing DB transfer services after intervention from the Financial Conduct Authority (FCA), with County Capital Wealth Management, also trading as Pension Review Service, being the latest to join the list.
At the end of last month, the FCA announced it will be collecting data from all financial advice firms which hold pension transfer permissions during this year.
In October, the FCA revealed that advice in more than half of the defined benefit pension (DB) transfers where the recommendation was to move the retirement pot was unsuitable or unclear.
In its latest update the Pension Ombudsman said: “We continue to receive new complaints and a high volume of enquiries from members and their representatives. As such, we anticipate further complaints regarding the expected BSPS transfer into PPF.”
The regulatory body is working closely with the BSPS trustees to ensure that all those members who wish to bring a complaint “are able to do so as easily as possible,” it said.
Before the Ombudsman considers any of these complaints, they must be raised with the trustees and dealt with under the internal dispute resolution procedure (IDRP).