Tata steelworkers pension firms in watchdog probe
AROUND 17 companies are being investigated for their handling of pensions advice to steelworkers, the Financial Conduct Authority (FCA) has said.
Concerns were raised last month that Port Talbot steelworkers were being targeted by rogue financial advisers trying to persuade them to hand over their pension pots.
Since then, around 60 current and former steelworkers from the plant have met representatives of the regulator, saying that they have been given poor advice about the British Steel Pension Scheme (BSPS).
The separation of the BSPS from Tata Steel left members with two options – switch to a newly-established scheme which promises the same benefits as the BSPS, but with lower future increases, or do nothing and have their pension transferred into a “lifeboat” scheme, the Pension Protection Fund (PPF), and receive PPF compensation.
The deadline for steelworkers to make a decision is December 22.
So far it is believed that around 30,000 members from across the country have failed to respond.
If they do not, they will automatically be placed in a default arrangement.
The FCA has said that it will take action if evidence of any wrongdoing is found.
Four firms have already been stopped from giving pensions advice after the intervention of the financial regulator.
Due to the confusion, Aberavon MP Stephen Kinnock has asked for the deadline to be extended to give workers more time to make a decision. He has also contacted the FCA to find out what action the authority is taking.
Mr Kinnock is due to meet with Andrew Bailey, the Chief Executive of the FCA next week.
“I am increasingly concerned about the stories of unscrupulous advisers targeting the steelworkers and cheating them out of their pension money,” he said. “I will be raising these concerns directly with the Chief Executive of the Financial Conduct Authority. With highly valuable final salary pension schemes, and limited information and support available to make an informed decision, steelworkers have been targeted by those wishing to exploit the situation. In some situations they have been given advice, contrary to current regulatory advice, to transfer final-salary benefits into riskier schemes without any risk-profile checks, or into unsuitable investments and other products with unnecessarily high charges.
“With contradictory advice flying around and the danger or receiving poor advice which could leave them financially worse off, steelworkers are extremely worried and anxious about making such a massive decision.
“It is clear that the steelworkers have been left exposed to unscrupulous individuals who have sought to exploit them in what has been a very high profile pension saga.
“Urgent action needs to be taken to address this matter and protect steelworkers from these scams.”
Former steelworker Tony Taylor also expressed his concerns.
He said: “I’ve had lots of people coming to me to ask for my advice because lots of people don’t know where to turn.
“Leaflets and flyers are being handed out left, right and centre and I am very concerned, as is the trade union. Lots of people out there are looking for financial advice so it’s very easy for them to go to the wrong place.”