Defined Benefit  

Steelworkers in the dark about pension transfer requests

Steelworkers in the dark about pension transfer requests

Some members of the British Steel Pension Scheme (BSPS), who submitted pension transfer requests on time, have been left in the dark about when they will receive their money and if the original quote will be honoured.

FTAdviser has seen documentation regarding one of these cases, a steelworker referred to as Mr B, who received a letter on 12 February from the pension scheme, stating that his pension transfer documentation had been checked and appeared to be in order.

The same letter also stated the request would be prepared for payment, and was expected to be processed in four weeks.

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The cut-off date for the trustees of the old scheme to process and pay pension transfers was 16 February, so Mr B submitted his documents ahead of the deadline.

But on 28 March – the day before the BSPS entered in Pension Protection Fund assessment - Mr B received an email from the scheme, informing him that it hadn't been possible for the transfer payment to be paid by BSPS, therefore the transfer documentation will be forwarded to the PPF and they will be in touch with you in due course.

Since he was going to transfer out of the pension fund, the steelworker didn't choose the new BSPS scheme being created, and has therefore ended up in the pensions lifeboat.

Three months have passed since Mr B received the original letter saying his transfer was going to be processed, but he hasn't received the money or any other information regarding the process, or if the original transfer value is going to be honoured.

Back in March FTAdviser reported that steelworkers who requested a pension transfer but ended up in the Pension Protection Fund (PPF) before their request was processed, could see their quoted retirement pot slashed by around 20 per cent.

Paul Stocks, financial services director at Dobson & Hodge, and the adviser of Mr B, made a complaint on 9 April to the trustees of the scheme, but didn't receive any response.

When contacted by FTAdviser, a spokesman for the trustees of the old BSPS said: "The member in question did not opt to transfer to the new BSPS and so remains a member of the old BSPS.

"The old BSPS entered a PPF assessment period on 29 March 2018. Generally speaking, transfers out of a scheme in PPF assessment are not permitted.

"However, the member in question along with a number of other members appears to have made a valid request to transfer out of the old BSPS prior to 29 March 2018 and so his original transfer quotation will be honoured and paid in due course."

Barnett Waddingham, which since 29 March has been the new administrators of the old scheme, are now liaising with the former administrators of the pension fund, “to check the member's transfer out paperwork and pay out this transfer as soon as possible," the trustees spokesperson said.

However, the consultancy firm isn't giving a specific timeline to when it will be making these payments.