Regulatory and consumer bodies welcome review of pension scheme communications provided to steel workers.
The Pensions Regulator (TPR), The Financial Conduct Authority (FCA) and The Single Financial Guidance Body (SFGB) today welcomed an independent review by Caroline Rookes into communications and support provided to British Steel Pension Scheme (BSPS) members during the 2017-18 pension restructuring exercise and the ‘Time to Choose’ exercise.
The review, commissioned by TPR, proposes a number of recommendations for the regulatory and consumer bodies to help savers make the right decision about whether to transfer their pension pots from a defined benefit (DB) scheme.
In a joint statement, the organisations said:
“We thank Caroline Rookes for producing her independent review which will ensure that important lessons are learned from the experiences of the members of the British Steel Pension Scheme.
“We will now consider how we will act on the report’s recommendations including where appropriate having discussions with the Department for Work and Pensions (DWP).
“We are already working closely together to provide an increased level of support to trustees and scheme members where there is uncertainty around the future of a DB pension scheme.
“We are also today publishing a joint protocol to ensure we work in a co-ordinated way to support members of pension schemes. Our joint working also includes providing letters for trustees to send to members alerting them to the risks of transferring out of DB pension schemes and giving practical information. The letter has already been sent to 31 pension schemes.”
Lesley Titcomb, Chief Executive of TPR, said:
“We welcome the report which acknowledges the good outcome secured for members through an innovative restructure of the pension scheme which we approved. The arrangement led to a £550 million cash contribution to the British Steel Pension Scheme and brought certainty for around 125,000 scheme members. It was a strong outcome because the vast majority of members made an active choice with most opting into the new scheme.
“We are grateful to Caroline Rookes for identifying a number of useful themes in her review which will help ensure pension savers are less likely to make transfer choices which are not in their best interests. We will now work together with trustees and the government so that we can all address the review’s recommendations.
“By working closely with the FCA, TPAS and now the Single Financial Guidance Body, we are determined to help minimise a repeat of the difficult circumstances in which some members of the British Steel Pension Scheme have found themselves.”
Megan Butler, Executive Director of Supervision – Wholesale, Investment and Specialist at FCA said:
“We welcome the recommendations put forward by Caroline following what has been a comprehensive review. The report is an honest, impartial account of what was a difficult and sensitive situation.
“The FCA stands by the action it took in those challenging times but, as with every case where we have had to intervene, there are always important lessons to be learnt. The FCA remains firmly committed to working with TPR and the Single Financial Guidance Body – and other organisations – to ensure we are all working together to continue to protect pension savers and take on board the lessons from British Steel.
“Much of this work is already underway, and has been since early 2018 – and our joint protocol is the product of that initial work. However, Caroline has made some further recommendations that we will be discussing with our counterparts at TPR and the SFGB.”
John Govett, Chief Executive of the SFGB, said:
“We welcome the review by Caroline Rookes into the British Steel Pension Scheme.
“The review makes a number of practical recommendations on how we can work with trustees and other industry bodies to better protect members and help people in restructuring situations make informed decisions about their retirement savings.
“We will be looking carefully into how we can take forward the report’s recommendations under the wider work of the Single Financial Guidance Body; specifically, the importance of collaboration and working together with regulators and the pensions industry, which will be key to providing better consumer protection.”
If you have any concerns about pensions contact The Pensions Advisory Service for free on 0800 011 3797.”