MPs to meet steelworkers over pension compensation

MPs to meet steelworkers over pension compensation

MPs will meet a group of steelworkers next week to discuss how their pension compensation was calculated by the Financial Services Compensation Scheme (FSCS).

The FSCS is in the process of paying out £531,000 relating to claims it has received against Active Wealth, which advised as many as 300 steelworkers, of which 64 transferred out of the British Steel Pension Scheme (BSPS) into alternative pension arrangements without taking further advice.

But some within the adviser community claimed the method for calculating the compensation was too narrow, focussing on the point when the workers transferred, rather than looking at their "pensions journey".

Article continues after advert

This prompted concerns steelworkers could be left out of pocket even if they received compensation.

Active Wealth was the first firm to be stripped of its pension transfer permissions by the Financial Conduct Authority (FCA) and went into liquidation in February.

It was working alongside unregulated introducer Celtic Wealth Management & Financial Planning, which had referred the clients to the adviser.

The meeting, which is set for November 22, is in response to calls from members of the adviser community to review how the compensation payments were being calculated.

One of the most vocal of the group has been Al Rush, principal at Rutland-based Echelon Wealthcare, who organised free counselling sessions for scheme members and established the ongoing Operation Chive (Counselling, Help, Information, Volunteer Exchange) initiative.

Mr Rush said: "We want FSCS to review some of its offers. These men are decent and honourable workers who were lied to, and who now, in some instances, find themselves without any compensation at all.

"I don’t think any of us can look at that and regard it as an optimal outcome. 12 months on, it’s an injustice that won’t go away."

Stephen Kinnock, the Labour MP for Aberavon in South Wales, will be among those meeting 15 steelworkers in Westminster to understand how the current calculations could disadvantage them.

Mr Rush said the steelworkers accepted the FSCS was operationally independent from the FCA and it was clear how it calculated compensation.

"However, FSCS also has some latitude in that if it considers that departure from the Compensation Specification is essential in order to provide the claimant with fair redress, it may consider so accordingly," he said.

Mr Rush said Megan Butler, the FCA's director of supervision - investment, wholesale and specialists, had been "quietly supportive" of the group’s efforts. He added the steelworkers realised as the issue was "live" the regulator was limited in what it could say on the matter, but were aware work was going on behind the scenes.

He said: "It’s important to note that we aren’t storming Westminster, we’re simply coming to see that all parties are up to date on all matters and to consider how to progress. It’s a form of AGM, nothing more than that. We feel that this is a logical way for all interested parties to remain informed."