Two Labour MPs have written to the financial regulator’s complaints commissioner about the Financial Conduct Authority’s performance, specifically around the handling of the British Steel Pension Scheme transfers.
In a letter, dated to July 11, MP Stephen Kinnock and Nick Smith wrote to complaints commissioner Amerdeep Somal requesting a meeting to discuss the challenges faced by steelworkers and the FCA’s “slow response”.
They wrote: “In a recent letter we requested a meeting with you to discuss the issue of the British steelworker pension scheme, and specifically the failure of the Financial Conduct Authority to meet their four-week service standard, with some complaints taking more than six months to be processed.
“We are deeply concerned that the process is unacceptably slow.”
The MPs said in previous letters, they highlighted the issues by the regulator, such as the delayed response, the inequality of compensation, the continuation of bad behavior from a number of IFAs and the lack of enforcement.
“We have also set out a number of individual cases illustrating these points,” they wrote.
“I won’t repeat these here, but I will ask that you at least set aside half an hour for us to discuss these issues with you. This can be online/virtual if easier for you.”
The MPs said the letter was placed in the public domain due to the “intense local public interest”.
A spokesperson for the FCA said: “We have received the complaints, and will keep complainants updated. The issues involved are complex and it’s only right we investigate properly.
“The circumstances around British Steel Pension Scheme transfers were exceptional, and we know that many members lost out due to poor advice.
“We’ve confirmed a redress scheme which should see advice firms pay over £49mn of compensation to steelworkers. That’s in addition to over £100mn which has already been paid out.”
The regulator said it has made sure that only firms with the right skills and experience can provide advice on pension transfers in future – over 700 firms have stopped doing so due to its work.
“We have carried out around 30 investigations into firms and individuals regarding DB transfer advice related to BSPS and begun publishing the outcomes of these, as well as continuing to take action where firms aren’t following the rules of the redress scheme,” it said.
“We’ve also learnt real lessons for the future, including improving how we work with other regulators. The National Audit Office looked at this closely and we responded in full to their findings.”
The BSPS case
During 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.
About 8,000 members transferred out of the 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 Financial Conduct Authority that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.
