British Steel Feb 8 2023

Rush: Pensions review regulation should be included in BSPS redress

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Rush: Pensions review regulation should be included in BSPS redress

Echelon Wealthcare principal Al Rush has written to the regulator with concerns over its redress calculation for members of the British Steel Pension Scheme who were given poor advice.

In a letter to Financial Conduct Authority boss Nikhil Rathi, Rush said he wrote to the regulator in December about how some regulation and legislation relating to the Pensions Review from the 1990s and 2000s may have been overlooked when calculating compensation for steelworkers.

He said: “I have yet to receive a response despite repeating my request, apart from a remark published in an article from your press office which seems to debunk my suggestion.”

In the letter, Rush said that the FCA response is further supported by a freedom of information request, written by Megan Butler, in which she said BSPS compensation is “not” linked to that earlier period.

Rush said: “[This is] contrary to assumptions established by the Financial Services Compensation Scheme and Financial Ombudsman Service which tell me the regulations still underpin how they deal with compensation.”

Speaking to FTAdviser, Rush explained that there are many provisions which still exist within the pension review regulations from the 1990s and 2000s which should be taken into account, but are not.

He wrote: “At the conclusion of the pensions review, it was agreed that although the legislation would not be routinely updated, periodically, it should be evolved. 

“Consequently, the Investment Liaison Group and the Financial Services Compensation Panel nominated Price Waterhouse Cooper to provide that input.”

Rush urged the FCA to “expedite a definitive response”. 

It asked the City watchdog if it - and by extension the FSCS and Fos - agrees that regulations and bulletins published by the Financial Services Authority in the 1990s and early 2000s remain in force and thereby constrain with them provisions made in accordance with the Financial Services Markets Act 2000.

An FCA spokesperson: “We sent a response on these points to Mr Rush’s legal advisers earlier in January. 

“We will consider this further letter and respond in due course.”

Both the FSCS and Fos declined to comment.

In March, the FCA introduced a redress scheme for former BSPS members who have not complained.

Under the scheme firms will have to review the advice they gave and pay redress to those who lost money because of unsuitable advice. 

It estimated that 1,400 steelworkers will receive £71.2mn in redress under the scheme.

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