Steel workers at mercy of ‘vultures’ MPS slam handling of pensions shake-up

A CATALOGUE of failures allowed “vultures” to prey on steelworkers and their pensions, a damning report has found.

Ministers and regulators are accused of allowing shady financial advisers to “bamboozle” members of the British Steel Pension Scheme in what MPS called a “major mis-selling scandal”.

It followed Tata Steel’s plan to shut its 124,000-member defined-benefit scheme, claiming it threatened the future of the company and the Port Talbot plant in South Wales.

Scheme members were given a choice of moving to a new final-salary scheme, going into the Pension Protection Fund or switching to a defined-contribution scheme – known as a DB transfer. All options left members worse off.

A report from the Commons Work and Pensions Committee said members were “woefully under supported”, singling out the Pensions Regulator.

Just 18 scheme staff were available to handle detailed queries and a helpline was opened just a fortnight before a crunch deadline.

It allowed “dubious” firms – aided by “parasitical introducers” – to target members.

Steelworkers yet to reach pension age were encouraged to opt for DB transfers, with advisers pocketing fat fees. Since last March, 2,600 members have transferred £1.1billion, with average transfer values of £400,000, but 20 people transferred more than £1million each.

Most members opted for the new final-salary scheme. But thousands of others are out of pocket by going into the Pension Protection Fund. The report criticised ministers for blocking “deemed consent” that could have secured them a better deal.

Frank Field, chairman of the Work and Pensions Committee, said: “Once again we find the Pensions Regulator fiddling while Rome burns, when it should have seen this rip-off coming.”

Jack Dromey, Shadow Pensions Minister, branded it a “national scandal”.

He said: “It has long been clear that ministers were asleep at the wheel.”

The Pensions Regulator highlighted the £550million obtained for the new scheme and the action it took against unscrupulous advisers. It said: “We note the committee’s recommendations.”

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