British Steel  

MP continues fight for steelworker redress scheme

“To do this, we are undertaking further work to understand the potential impact the use of this power could have on the wider market and on pension freedoms.”

Timing issues

But Smith is worried that time is running out for the scheme to be put in place as many steelworkers are coming close to the six-year statutory limit for bringing claims.

Limitation periods start from the 'date of accrual of the cause of action'- the first time it was possible to lodge a claim - and last for six years.

Smith said: “This is one of the things that we have been mindful of, the time, when we've had to sort of push and drive the FCA, and the other agencies and regulators along all the while in this campaign.”

He added campaigning to find more time for steelworkers was on his mind.

Smith said: “We've concentrated on the redress and trying to get that sorted first of all, so [timing] could be a next avenue for us to go down. 

“Because clearly, it would be hugely unfair if people were timed out because regulators were too slow responding to steel workers’ long standing complaints.”

When asked whether lessons have been learnt from the BSPS saga, Smith said not currently because this has issue has been rumbling on for so long that different aspects and other issues kept popping up.

Smith said: “First there was the question of how this occurred in the first place and then trying to understand it and to make amends. 

“As you go along, you realise the hoops that steelworkers have had to jump through to get justice and how much support they need, because they are steelworkers and they haven't had the financial backgrounds that others have.

“It's highlighted the amount of consumer support which is necessary, and then you come to whether the regulators are fit for purpose in terms of the support they give.”

Latest figures from the FSCS showed it has paid out £21.5m in total so far to members of BSPS who were wrongly advised to transfer their defined benefit pensions.

The lifeboat scheme told FTAdviser it had made 482 decisions, including decision rejecting the claim, with an uphold rate of 88 per cent.

The average compensation has been £50,000 but the overall compensation amount could be set to grow significantly as the FSCS still has 135 claims in progress.

The BSPS case

Three years ago British Steel Pension Scheme members were asked to decide whether to move their DB pension to a new plan, BSPS2, or stay in the existing fund, which was then moved to the PPF as part of a restructuring of pension liabilities, or to transfer out altogether.