Fourteenth Report - Investigation into the British Steel Pension Scheme

The FCA acknowledges that there are lessons to learn, but is concerned that the report does not fully acknowledge the ways the FCA has responded since 2017. The FCA will provide updates in line with the Committee’s recommendations and a response to some of the wider conclusions of the report in a letter dated 22 September 2022.

The FCA will provide a high-level update on enforcement activity and the Treasury outlined existing mechanisms to address activity outside the FCA's perimeter, but did not commit to specific changes to enforcement powers or the regulatory perimeter.

The FCA has considered how further redress mechanisms can be implemented more quickly and provide fair compensation and its plans to improve the redress framework is in the FCA Business Plan for 2022/23, but it does not offer specific changes to resolve differences in compensation levels.

The FCA agrees with the Committee’s recommendation to be more proactive and consumer-focused in its engagement with stakeholders. The FCA’s Business Plan sets out its commitments for tackling conduct that can cause serious harm and how the organization is joining up its tools to act efficiently, effectively, and consistently. On BSPS, working in partnership with the FOS and the FSCS, the FCA has engaged extensively with former BSPS members over a significant period of time.

The FCA, FOS and FSCS will write to the committee on 21 January 2023 to explain what they are doing to manage risks in the redress system for financial service; the FCA disagrees with the recommendation to review its handling of the wider DB transfer market.

The government acknowledges the Committee's report and states it is the FCA’s response to the Committee’s report.

The FCA acknowledges the catastrophic impact on members and shares concerns about unsuitable advice, referencing meetings with steelworkers and the consultation paper CP 22/6.

The FCA acknowledges that it failed to take swift and effective action at all stages of the BSPS case and shares concerns about unsuitable advice, referencing meetings with steelworkers and the consultation paper CP 22/6.

The FCA agrees with the committee's recommendation and shares concerns about unsuitable advice, referencing meetings with steelworkers and the consultation paper CP 22/6.

The FCA provided a high-level update on enforcement activity related to BSPS, stating it is a high priority and investigations are at an advanced stage.

Intervention work carried out by the FCA has also led to 48 firms withdrawing from the defined benefit pension transfer advice market. Interventions made by the FCA have required firms to cease all regulated activities relating to DB pension transfers and have stopped firms providing DB pension transfer advice to BSPS customers.

The FCA is able to provide a high-level update on enforcement activity related to BSPS, stating that enforcement activity related to BSPS is a high priority. The FCA currently has c.30 ongoing investigations into firms and individuals relating wholly or partly to BSPS advice and five of them have entered either Stage 1 settlement discussions or the Regulatory Decisions Committee.

The government disagrees with the Committee’s recommendation but welcomes the Committee’s view on the need for effective mechanisms to consider and, where appropriate, address concerns about activity that is not within the FCA's regulatory perimeter. The government has concluded that, on balance, the key mechanisms that currently exist are appropriate to address the types of concern highlighted by the Committee.

The FCA has considered how further redress mechanisms can be implemented more quickly and provide fair compensation. The FCA Business Plan for 2022/23 sets out its plans to improve the redress framework, including carrying out redress exercises with firms where appropriate, so they can quickly remedy harm.

The FCA states it will consider the Committee's feedback as part of its wider response to the BSPS redress consultation. The FCA explains its redress calculation methodology is designed to respond to changes in financial markets and produce an appropriate redress figure at the point at which the redress is calculated.

The FCA states it will consider the Committee's feedback as part of its wider response to the BSPS redress consultation. The FCA explains its redress calculation methodology is designed to respond to changes in financial markets and produce an appropriate redress figure at the point at which the redress is calculated.

The FCA agrees with the committee's recommendation and describes its Business Plan commitments and engagement efforts with BSPS members and other consumer engagement methods.

The FCA disagrees with the Committee’s recommendation and does not consider that a review of how it is handling the wider DB transfer market should be undertaken, stating that the harm associated with BSPS is unique and not replicated elsewhere.

Seven years after the Pensions Schemes Act, regulated bodies are still not clear on the Financial Conduct Authority’s expectations for consumer protection.

The FCA removed the starting position rule in October 2020, has found a deterioration in the quality of advice, and published CP22/6 which if implemented would require firms to review their advice and pay redress to consumers where that advice was unsuitable, and will publish a Policy Statement on this later in 2022.

The FCA, FOS and FSCS will write to the committee on 21 January 2023 to explain what they are doing to manage risks in the redress system for financial service.

The FCA agrees with the committee's recommendation and describes its Business Plan commitments and engagement efforts with BSPS members and other consumer engagement methods.

The Government restates the committee's conclusion regarding PII cover and the FSCS levy.