Defined Benefit  

Steelworkers baffled after attending FCA seminar

Steelworkers baffled after attending FCA seminar

Several steelworkers were left disappointed after attending the Financial Conduct Authority seminar on pension transfers this week, with many considering the information to be confusing.

FTAdviser spoke to former members of the British Steel Pension Scheme who attended the event in South Wales on Wednesday (August 21) and felt the regulator had given them too much information to process. 

About 30 former members of the defined benefit scheme were present at the Princess Royal Theatre, Port Talbot, alongside representatives from the Financial Ombudsman Service, the Financial Services Compensation Scheme and the Money and Pensions Service.

One steelworker, who didn’t want to be named, said it would have been more helpful if the watchdog had given a typical example of a bad transfer case than the generic information it did.

He said: “I thought it was a bit confusing, because the whole focus is on the transfer, they put these slides up and ask ‘did you receive this advice, did they consider personal circumstances’.

“It wasn't clear cut. They were trying to be as succinct as possible, but they made it very difficult.

“What they should have done was to have someone on stage, a steelworker, x amount of pension, this is what he did, this is what happened to him, and this is what he should do now. He transferred out, he went to see 3, 4, 5 advisers, was told the same thing by them all.”

The steelworker felt the FCA was “missing the point” on focusing on what happens after the transfer, as “it is the actual act of transferring out that was wrong”.

He explained that several of his colleagues don’t consider they have been mis-sold as their pension investments, now in the majority of cases in a defined contribution scheme, were performing well, and the value had increased when compared to the transfer value at the time.

The FCA has been approached for comment.

FTAdviser reported earlier this month that the watchdog wrote to all former BSPS members who transferred out of their pensions inviting them to attend the seminar.

Another seminar will be held in Port Talbot on September 5, in a series of events aimed to give steelworkers the “opportunity to understand what the advice process should have looked like for them.

“This information will help them to decide whether to make a complaint,” said Chris McGrath, head of the investment intermediaries and scams department at the regulator, in the letter.

The events include information about how the advice process should work, what questions the advisers should have asked steelworkers, what financial advisers should have done to demonstrate their recommendation.

They also look at what services advisers should provide to members after the transfer.

Members of the BSPS were asked to decide what to do with their pensions as part of a restructuring process in 2017.

As a result, about 8,000 members transferred out of the old scheme by October last year, with transfers collectively worth about £2.8bn.