FCA responds to Complaint Commissioner’s report on the British Steel Pension Scheme
Executive Summary
The FCA's response to the Complaint Commissioner's report on the British Steel Pension Scheme addresses systemic failures in pension transfer advice that affected approximately 7,700 members, with 47% receiving unsuitable advice. This statement demonstrates the FCA's acknowledgment of regulatory shortcomings and outlines remedial measures implemented to prevent similar harm, including enhanced inter-agency collaboration, stricter product governance rules, and a £106 million redress scheme now benefiting 1,870 affected members.
What Changed
The FCA has implemented the following regulatory and operational changes in response to BSPS failures: - Enhanced inter-agency collaboration: Closer coordination between the FCA, The Pensions Regulator, Pension Protection Fund, and Money and Pensions Service to improve intelligence sharing on defined benefit (DB) pension transfer risks - Data collection and monitoring: Expanded collection of pension transfer data from advisory firms to proactively identify emerging risks and market trends - Contingent charging ban: Prohibition of contingent charging arrangements for DB pension transfers to eliminate conflicts of interest where adviser compensation depends on transfer completion - Consumer transparency tool: Development of a self-assessment mechanism enabling consumers to identify wheth
What You Need To Do
- *For firms that provided DB pension transfer advice
- *Conduct retrospective suitability reviews of all DB pension transfer advice provided, particularly during 2015-2018, identifying unsuitable recommendations
- *Calculate and pay redress to affected customers to restore them to their pre-transfer financial position, with reference to the FSCS redress methodology
- *Implement enhanced governance for DB pension transfer advice, including:
- Documented suitability assessments with clear rationale
- Enhanced fact-finding to understand customer circumstances
Key Dates
Compliance Impact
Urgency: HIGH
Who is Affected
Summary
We sympathise with former members of the British Steel Pension Scheme (BSPS) who lost money after they were given unsuitable advice from people they trusted. Complaints are a valuable source of feedback which help us improve and learn. There have also been 4 independent reports into the BSPS since 2018, which have helped us learn lessons. We have accepted several of their recommendations and implemented improvements, including those below.We now have much closer collaboration between the FCA,...