Following the high profile separation of the British Steel Pension Scheme (BSPS) from Tata Steel, members were given the choice to either move their pension to a new British Steel Pension Scheme, do nothing and remain in the current scheme, which will eventually fall into the Pension Protection Fund (PPF), or transfer out. Now the December deadline has passed, it has been reported that of those BSPS members who took advice, a third of them were given poor advice and subsequently the Financial Conduct Authority is investigating 17 companies.
Stuart Price, Partner and Actuary at Cardiff-based pensions specialist Quantum Advisory, has been open about the difficult situation members were put in and how little they were supported since the separation in August. Stuart said: “130,000 members were left to make their own decision about the future of their pensions. While on paper this sounds like a positive outcome, in reality, individuals were given little support and left confused. I saw the information being sent to BSPS members, which was not easy to understand and, in my opinion, did little to help their situation.
“If the stories about poor advice to Tata employees are true, this will have a knock-on effect on both the individuals who may lose out financially, and also the pension industry. Hopefully, those employees who have been given poor support will be able to reclaim the losses from those that ill-advised them and, if any wrongdoing can be proven, those who advised them will not be allowed to advise others in the future. Even if this is the case, I expect that will take time and cause much stress for those Tata employees impacted.
“For anyone uncertain about their pensions and looking for trusted advice, the Pensions Regulator, Pensions Advisory Service (TPAS) and Pension Wise all offer free, authoritative support.
“If there’s one thing to learn from this unfortunate situation, it is that we, as an industry, need to improve the way we communicate to individuals about pensions so that it is simple and easy for them to understand. If we achieve this, we can restore people’s faith in pensions.”
Stuart Price, Partner and Actuary at Quantum