At least 40 more steelworkers are filing complaints against the advice received to transfer out of the British Steel Pension Scheme, FTAdviser has learned.
This is a second cohort of claims that will hit IFAs in Wales, this time in the area of Teesside and Scunthorpe where other Tata Steel works are located, after the debacle that has previously occurred in Port Talbot.
FTAdviser can reveal that a group of some 100 steelworkers met with representatives of Clarke Willmott, the solicitor firm that helped former BSPS members bring claims, and at least 40 of them have come forward with a complaint.
The complaints will be brought to the advice firms in the first instance and could then land at the Financial Ombudsman Service, or even the Financial Services Compensation Scheme if the advice firms go bust.
Philippa Hann, managing director of litigation at Clarke Willmott, said: “They told familiar stories about feeling unprepared for the decision and in the dark about what they should do. They were frightened of the scheme falling into the PPF but were given little information about what that really meant.
“For those I met, the overriding impression was that the PPF was ‘a bad thing’ and many were told that they could not receive an income from the PPF until they were, at least, 65. They told me that their advisers did little to explain the PPF or assuage those fears.”
Steelworkers are allowed to retire early due to the nature of their work and can access benefits from the age of 55, subject to their employer agreeing to their retirement.
PPF rules also allow members to retire early, starting at 55 years old.
Robert Welch, a BSPS pensioner who has been helping former colleagues with information, said he had a list of 65 steelworkers who want to come forward with claims.
He said these former members, who transferred out in early 2017, have already filed complaints to The Pensions Ombudsman due to the cash equivalent transfer values they received.
In May 2017 – some months after they transferred out - BSPS trustees had recalculated the CETV based on actuarial calculations, which increased the transfer values.
Mr Welsh said: “These people are very disappointed, in hindsight, about how low value their CETV was, so the advice they received from the IFAs did not do anything to quell that misery, so they believe that they should not have transferred out.”
He explained the steelworkers were 'terrified' of being moved to the Pension Protection Fund, and the advisers “didn’t fully explain what that meant for them”.
He added: “They said they wanted to retire at 60 and if they went to the PPF they would not be able to do that - that was uncontested by the IFAs.”
The latest group of steelworkers differs from the one in Port Talbot due to the timeline of the transfers.
The Teesside and Scunthorpe workers transferred out when the issues with the British Steel Pension Scheme were still ongoing, and the creation of a new defined benefit scheme, the BSPS II, hadn’t been proposed.