Source · Select Committees · Public Accounts Committee
Recommendation 9
9
The former Chief Executive of the FCA told us that, as the BSPS case unfolded,...
Conclusion
The former Chief Executive of the FCA told us that, as the BSPS case unfolded, the FCA did not have the data to tell it which firms had provided advice to members and found it difficult accessing this information when it needed it. This delayed its response and meant it was unable to warn BSPS members of the risks as soon as it would have liked.21 10 C&AG’s Report, para 2.4 11 C&AG’s Report, para 3.8 12 Q 9 (27 April) 13 C&AG’s Report, para 10 14 Qq 2, 36, 53 (27 April) 15 Q 8 (27 April) 16 Q 23 (27 April) 17 Q 57 (27 April) 18 Qq 59–63 (27 April) 19 Written evidence submitted by PIMFA dated April 2022 20 Qq 39, 40 (27 April); Q 46 (13 June) 21 Qq 23, 36 (13 June) Investigation into the British Steel Pension Scheme 11 The FCA’s lack of market data meant it was also unaware of the scale of BSPS transfers taking place to enable it to initiate a proactive response.22 Transfer data is monitored by The Pensions Regulator (TPR), the regulator of occupational pension schemes, but was not collected in real-time or shared with the FCA.23 Since the BSPS case, the FCA told us it has made significant changes to its co-operation and data sharing with TPR and where similar risks have been identified, such as in the Rolls-Royce case, the regulators have worked together to issue early warnings to consumers.24
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 organization 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.