The FCA has published a dear CEO letter addressed to firms who advised British Steel Pension Scheme (BSPS) members between 1 March 2017 and 31 March 2018. The letter identifies the high levels of unsuitable pension transfer advice that the FCA has seen in relation to BSPS members compared to members of other defined benefit pension schemes.
The FCA’s board has asked for a consultation to be prepared on a redress scheme for former members of the BSPS who transferred their pension. The FCA expects to consult by the end of March 2022.
The letter itself sets out what the FCA expects of those firms who are in the scope of a potential redress scheme, in particular that they should:
- retain assets for the potential redress exercise by not disposing of any assets or funds except in the ordinary course of business, and consider the firm’s solvency, taking account of potential redress, before making any payments; and
- not try to avoid their responsibilities (eg by applying to cancel their authorisation without first discussing their plans with the FCA).
Former BSPS members are encouraged to consider whether they received unsuitable advice. Firms already engaged in Past Business Reviews and other related enforcement investigations or supervisory work should continue to engage and progress with these.