Pension Transfer Complaints

This week the FCA has announced that it will begin a consultation on the method used to calculate redress in complaints brought by former final salary scheme members over poor advice they received on their transfers out of schemes.  The current redress method was put in place in the 1990s and is intended to put consumers back in the position they would have been had they stayed in the final salary scheme.  Following consultation, changes may be made to this principle and the basis for redress.  The consultation which will begin in the autumn is therefore relevant to those considering making a complaint and those whose complaints are ongoing.

The FCA has stated that firms handling ongoing complaints over advice on pension transfers from final salary schemes, or who receive new complaints before the outcome of the consultation, must continue to comply with their current obligations:

  • to investigate the complaint competently, diligently and impartially, and
  • to assess the complaint fairly, consistently and promptly.

However, where a firm concludes that redress should be offered to a complainant after investigation, the FCA has stated that the firm should not attempt to settle the complaint on a ‘full and final’ basis until the outcome of the consultation is known.  Firms must write to complainants explaining why it is not in a position to provide a final response i.e. because of the consultation.  In addition, until the outcome of the consultation is known the FCA expects firms to deal with complaints fairly taking practical steps to assist complainants in the interim.  For example, if it is able to do so, the firm may offer provisional redress now and then provide a final response and any further redress (where appropriate) once the outcome of the consultation is known.

If you are a consumer complainant, therefore, caution should be taken to avoid entering into full and final settlement agreements at this time.  Also, for consumers, the consultation may cause a delay in the receipt of full redress.  To overcome these difficulties the FCA intends to reach its conclusions by spring 2017.

If you think the consultation may affect you or you wish to take advice on making a complaint about your pension transfer please contact Suzie Done on 01661 844 185 or suzie@clairecollinsonlegal.co.uk

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