British Steel  

Warning steelworkers could miss out on redress scheme

But Al Rush, principal of Echelon Wealthcare, warned: “We should also remember that the periodic review of pension transfer redress guidance is due at the same time. It would be an especially cruel blow if after all this time, the redress scheme coincided with more modest compensation.”

Robinson said there was a need to reform PI insurance for advisers, saying the redress scheme could push more firms into insolvency, despite the regulator's best efforts to prevent this.

She said: “It is imperative that the FCA launches a project around bringing PI into line with other professions where the bad behaviour of the minority is not paid for by the good.”

Others believe the trustees have also played a part in the BSPS debacle.

Kevin Hollister, director at retirement calculator Guiide, run by introducer Bespoke Retirements, said many members considering a transfer had been signposted to Unbiased or the FCA website. 

“Four years on, trustees of around 80 per cent of DB schemes are still providing members with very similar signposting today,” he said.

“At Guiide we believe the focus is currently the wrong way round and it ought to be mandated, or at least strongly encouraged, that trustees put in place access to vetted and reputable DB transfer specialists for their members.”

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.

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

But concerns about the suitability of the transfers were soon raised, leading to an intervention from the FCA that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.

Over recent months, the FCA, along with the Financial Ombudsman Service, the Financial Services Compensation Scheme, and MoneyHelper, have travelled to Swansea and Scunthorpe to hold one-on-one sessions with steelworkers to discuss their situations and offer help.

The regulator said DB advice firm numbers have shrunk from 3,000 in 2018 to 1,200 now as a result of the regulatory crackdown.

amy.austin@ft.com

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