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FCA Set to Hold Talks Over British Steel Pension Row
A brewing crisis over advice offered to members of the British Steel Pension Scheme has triggered urgent talks between the regulator and members of the U.K. parliament.
British members of parliament and the Financial Conduct Authority are set to hold talks over how the watchdog is handling a pensions row involving steelworkers.
The FCA has been scrutinizing companies due to concern they’ve provided workers incorrect advice on whether to transfer out of the £15 billion ($20.1 billion) British Steel Pension Scheme. Members of parliament and the FCA are scheduled to meet on December 19 to discuss the recommendations given to steelworkers in Port Talbot, Wales following Tata Steel’s decision to restructure, according to a spokesman for Stephen Kinnock, a member of parliament representing the area of South Wales.
In September, Tata announced the company reached a deal with the U.K’s Pensions Regulator to offload the British Steel Pension Scheme. The FCA is not doing enough to protect pension scheme members who are transferring out of a “gold plated” final salary pension, according to Frank Field, chairman of the Work and Pensions Committee.
“I remain concerned that its overall approach has been grossly inadequate,” Field said in a statement Monday. “The FCA is a consumer protection body. It would behoove them to stop pussy-footing around and start protecting consumers.”
The FCA’s head of supervision, Megan Butler, will attend the December 19 meeting, according to the spokesman for the British parliamentary member Kinnock.
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Field said that transferring out of defined benefit pension schemes like the British Steel Pension Scheme was “generally a terrible idea” and companies “routinely advising people” to do so should be immediately “shut out” from making such recommendations to workers. The chair of the Work and Pensions Committee said in a December 15 letter to the FCA that the regulator had previously acknowledged several companies were the target of “ongoing supervisory activity” for offering potentially unsuitable pension transfer advice to scheme members.
A spokesman for the FCA confirmed that the regulator had received the letter and said that it would be responding in the coming days.