The two regulators overseeing the pensions industry today met with affected employees in Port Talbot, Wales, in a growing sign of the backlash against the pension mis-selling scandal.
The Financial Conduct Authority (FCA) and The Pensions Regulator were to meet affected employees as MPs added their voices to concerns over potential defined-benefit pension mis-selling grew.
As reported in International Investment on 4 December, a scramble over some 130,000 union pension schemes held by UK steelworkers who are facing a 22 December deadline to choose where they wish their pension pots to reside after that date, prompted one pension transfer expert to go public with his “urgent” warning for those scheme members who live overseas currently, or who are intending to migrate abroad eventually.
Such individuals “are even more at risk from ‘expert’ overseas advisers” than their UK counterparts, Montfort head of financial planning Eugen Neagu said, explaining his and his company’s effort to reach out to such scheme members.
Other reports suggest that hundreds of steel workers received inappropriate financial advice to transfer out of their final salary BSPS at British Steel sites in Port Talbot and Scunthorpe.
‘Mis-selling’ followed takeover by Tata
The potential mis-selling followed Tata’s takeover of British Steel last year, when it was reported that financial advisers visited the two sites to sell schemes to employees.
This was a result of Tata’s decision to to offload the BSPS into the Pension Protection Fund.
Steel workers were given the option to transfer into the lifeboat fund, which would offer compensation for pension scheme members if the scheme failed, which could lead to some losing some of their benefits.
Another option was a new Tata Steel scheme, or a third option could see employees opting out into a private pension.
Some reports talked of financial advisers “descending upon” the steel workers, while others talked of “a feeding frenzy”.
A spokesman for TPR said: “We are attending the meeting in Port Talbot on Thursday as we feel it is important to talk directly to members of the BSPS about their concerns.
“We will be encouraging members to fully engage in the impartial and helpful communications from the BSPS trustees about making a choice about their pension.
“We also want to warn those who may be considering transferring their pension pot to be wary of scams and deals that sound too good to be true.”
The FCA said that it had banned three firms from attempting to speak to steel workers ahead of the 22 December deadline, while it would be speaking to six more firms over the coming days about concerns. None of the firms were identified.
Yesterday, directors of two firms accused of being part of the “feeding frenzy” refused to appear before MPs at the Work and Pensions Committee inquiry.
Chairman Frank Field MP said he was “surprised” that directors of Active Wealth UK and Celtic Wealth Management had declined the chance to put their version of event to the MPs in public, adding: “We may require them to come in”.