Source · Select Committees · Public Accounts Committee
Recommendation 7
7
The impact on members has been catastrophic, both financially and emotionally.15 Alongside losses caused by...
Conclusion
The impact on members has been catastrophic, both financially and emotionally.15 Alongside losses caused by unsuitable advice to transfer, many members face ongoing advice charges to manage their remining pension savings.16 The FCA is unaware of the total financial loss experienced by members, it told us that it is conducting further analysis as part of its consultation on a BSPS consumer redress scheme to understand the losses experienced by members.17 The FCA’s response
Government Response
Not Addressed
HM Government
Not Addressed
The Financial Conduct Authority (FCA) agrees with the Committee’s recommendation. Recommendation Implemented An update in line with this recommendation is contained within the letter from the Chief Executive of the FCA to the Chair of the Committee, dated 28 September 2022. The FCA shares the significant concerns of steelworkers, MPs and other stakeholders about the levels of unsuitable advice and recognises the harm that this has caused to steelworkers and communities. Over the past year, the FCA has met with over 400 steelworkers, providing support and listening to their concerns. The FCA has also carried out significant work to date to analyse both the extent and the impact of unsuitable advice on steelworkers. This is set out in the FCA’s consultation paper (CP 22/6 published in March 2022). Should we go ahead with a redress scheme, the FCA will be happy to update the committee with final unsuitability rates once the scheme closes. The Joint Protocol, currently operating between the FCA, the Pensions Regulator (tPR), the Pension Protection Fund (PPF) and the Money and Pensions Service (MaPS), sets a framework for increased communication and information sharing. Since its inception in January 2019, it has facilitated greater joint working and early intervention to address the risk of concentrated and/or significant numbers of members receiving unsuitable advice on DB transfers and/or any associated risks of pension scams or mis-selling that consumers may face. Actions have included issuing joint proactive statements, setting out the concerns and action each organisation will take, as exemplified by the statements associated with the Rolls Royce pension scheme and the P&O pension scheme. The FCA’s regular data return (discussed under recommendation 2 below) also enables the regulator to proactively monitor trends and engage with firms which are active in the DB market.