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Saturday, February 3, 2024

FCA warns BSPS redress scheme to value £140m

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The Monetary Conduct Authority (FCA) has warned that its proposed redress scheme for the British Metal Pension Scheme (BSPS) scandal may see recommendation corporations pay over £140m in compensation.

The regulator revealed its proposed redress scheme this morning, saying recommendation corporations may pay over £70m of extra compensation to British Metal staff.

Over £70m has already been paid out to BSPS members in compensation.

The BSPS redress scheme will usually comply with the identical methodology as all DB switch circumstances, however eh regulator has tailored some parts to mirror the actual circumstances of the BSPS scheme.

The regulator has additionally proposed establishing a redress calculator to assist make calculations extra constant, guarantee BSPS members obtain “truthful and fast” redress, and to scale back the general value of calculations to recommendation corporations.

The main points of the proposed compensation scheme had been revealed this morning as a part of a session on modifications to calculating redress for non-compliant pension scheme switch recommendation.

While the session paper stated the regulator believes its present methodology stays applicable and elementary modifications usually are not mandatory, it recognized some areas for enchancment or clarification.

The FCA has been closely criticised over the way it has responded to scandal, with MPs accusing the regulator of getting “insufficient” oversight of the corporations concerned.

The FCA session will shut on 20 September.

The regulator will publish modifications to its common method and the way it will implement the proposed BSPS client redress scheme this winter.

It expects the BSPS redress scheme to come back into power initially of subsequent yr, with members who’re eligible to obtain compensation later in 2023 or early in 2024.

In 2017, many British Metal staff had been suggested to switch out of their outlined profit pension into an outlined contribution pension, sometimes a private pension or a Self-Invested Private Pension (SIPP). The scandal has attracted nationwide consideration and criticism.

By transferring to a personal pension association, the BSPS victims would have probably misplaced advantages already constructed up within the British Metal Pension Scheme.


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