‘Ur­gent ac­tion needed over steel pen­sion scan­dal’ – MPs

Western Mail - - NEWS - Vicky Shaw and Gemma Parry news­desk@waleson­line.co.uk

ASTEEL pen­sions mis-sell­ing scan­dal is erupt­ing, ac­cord­ing to MPs, who said British Steel Pen­sion Scheme (BSPS) mem­bers had been “shame­lessly bam­boo­zled”.

The Work and Pen­sions Com­mit­tee said it had re­ceived wor­ry­ing ev­i­dence about fi­nan­cial ad­vice pro­vided to mem­bers of the BSPS.

BSPS mem­bers had, over the past year, “been ex­ploited for cyn­i­cal per­sonal gain by du­bi­ous fi­nan­cial ad­vis­ers in tan­dem with par­a­sit­i­cal so-called ‘in­tro­duc­ers’,” a re­port has said.

It added: “The cir­cum­stances sur­round­ing the BSPS cre­ated per­fect con­di­tions for vul­tures to take ad­van­tage.”

Un­suit­able ad­vice on de­fined ben­e­fit (DB) trans­fers is not only con­fined to BSPS mem­bers, the re­port warned.

It con­tin­ued: “Re­search by the Fi­nan­cial Con­duct Author­ity (FCA), which reg­u­lates ad­vis­ers, shows that only half of such ad­vice na­tion­wide meets its stan­dards. Yet more than 100,000 peo­ple a year are tak­ing DB trans­fers on the back of this ad­vice.

“An­other ma­jor mis-sell­ing scan­dal is al­ready erupt­ing and we there­fore call on the rel­e­vant bod­ies to treat this as such and take ur­gent ac­tion.”

Mem­bers were asked to choose be­tween two pen­sion schemes which of­fered in­fe­rior ben­e­fits to the BSPS – the Pen­sion Pro­tec­tion Fund (PPF) or a new scheme, BSPS2. But many scheme mem­bers had lost trust and a mem­ber com­mu­ni­ca­tion plan proved “woe­fully in­ad­e­quate”.

The Pen­sions Reg­u­la­tor was re­spon­si­ble for en­sur­ing mem­bers were not left in the dark.

But the re­port con­tin­ued: “All this failed. In­stead, faced with mak­ing a life-chang­ing choice in a hurry, many mem­bers were at­tracted to a third op­tion of a DB trans­fer. This was seem­ingly un­fore­seen by all those bod­ies with a duty to watch and act.”

One steel­worker at Port Tal­bot, who asked to re­main anony­mous, said: “The con­sen­sus is the BSPS failed to re­alise how many peo­ple would trans­fer their pen­sion into a pri­vate one and failed to pro­vide enough in­for­ma­tion ini­tially, and when they did be­come aware, the in­for­ma­tion they did pro­vide was too lit­tle and too late for the ma­jor­ity.

“Many mem­bers also feel the unions did not do nearly enough to help them. Mem­bers just wanted the facts and op­tions ex­plained clearly.

“Un­for­tu­nately the out­come left many in no man’s land – they had very lit­tle fi­nan­cial knowl­edge or ex­pe­ri­ence. Some would base their de­ci­sion to trans­fer out on the fact they thought the BSPS had been badly run by the trustees, which is why the scheme had shut. In re­al­ity, the facts were the scheme had been run very well.

“Those who did trans­fer out were then left the daunt­ing task of find­ing a suit­able fi­nan­cial ad­viser. There are good and bad fi­nan­cial ad­vis­ers.

“As mem­bers only had a small time­frame to trans­fer out, this left many un­able to.

“Those who did find a fi­nan­cial ad­viser and trans­ferred out may have not fully un­der­stood the con­se­quences, which is where the mis­selling is­sue arises.”

Frank Field, chair­man of the com­mit­tee which au­tho­rised the re­port, said: “All the re­spon­si­ble author­i­ties must act, now, to stop more peo­ple be­ing cheated.”

A spokesman for the Pen­sions Reg­u­la­tor said it had re­viewed com­mu­ni­ca­tions sent to mem­bers and was sat­is­fied they were prop­erly warned of the dan­gers of poor fi­nan­cial ad­vice.

A Tata Steel spokesman added: “The trust sup­ported mem­bers through the con­sul­ta­tion process with per­sonal in­for­ma­tion packs, road­shows and a free helpline ser­vice.”

> British Steel Pen­sion Scheme mem­bers have been ‘bam­boo­zled’, say MPs

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