A group of steelworkers in Port Talbot has instructed a solicitor firm to pursue a legal case against all parties involved in the recent defined benefit (DB) pension transfer scandal.
FTAdviser reported in November that several members of the British Steel Pension Scheme (BSPS) 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.
It emerged in February that the firm had advised as many as 300 BSPS clients, of which 64 proceeded to transfer out of the BSPS scheme into alternative pension arrangements without taking further advice.
Some of these clients saw their pension pots being invested in self-invested personal pension (Sipp) providers, such as Momentum Pensions, and managed by Gallium Fund Solutions, a Kent-based discretionary investment manager.
Active Wealth entered into voluntary liquidation on 12 February, months after the firm was told to cease any pension transfer activity by the Financial Conduct Authority (FCA).
Philippa Hann, partner at law firm Clarke Wilmott, is representing the steelworkers.
She told FTAdviser: “I can confirm that we are instructed by a number of the Port Talbot steelworkers who were advised by Active Wealth.
“Active Wealth is in liquidation so we cannot pursue a claim against that company unless it is to the Financial Services Compensation Scheme.
“We are looking at the other entities who were involved in the investment process to identify whether there is a claim to be made against any or all of them.”
Clarke Willmott has offered the steelworkers a nominal fee to assist with their claims going to the FSCS, and a no-win-no-fee for claims relating to other potential defendants.
Active Wealth has been approached for comment.
Al Rush, principal at Rutland-based Echelon Wealthcare, who has been assisting the steelworkers in this matter, said this legal action is the beginning of the end of what he considers to be “a long slog”.
He said: “I had no idea where this would lead, five months ago when it all started, but here we are.
"I have received numerous threats of litigation as a result of my involvement, and although those particular issues remain unresolved, and present an incredible personal burden that I never anticipated I’d ever have to face during my life, I remain unswerving in continuing to help these men and their families to the absolute maximum of my ability, and to discover just how this distribution process has evolved and who was involved.
“However painful it is to me, my troubles still pale into insignificance compared to the threat to retirements that these men and their families have had to endure.”
Around 130,000 steelworkers had to choose to move their 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.
Between March 2017 until the beginning of February 2018, the scheme has processed 2,600 pension transfers equating to a total value of £1.1bn, according to data revealed by the scheme trustees.
