What Al Rush and I are up to
I’ll be taking up to a week off over the next fortnight – partly because I have to and partly because I relish the opportunity of scooting around the country doing what I can to put British Steel Pension Scheme (BSPS) members in touch with good advisers.
Of course this is subject to demand and as yet we haven’t seen much demand for the sessions that Al Rush and I have promised the steelworkers of Port Talbot, we’ll know by Monday whether we’ll need to use the facilities of the Taibach Rugby Football Club or whether we can manage the enquiries over the phone or using the web.
If you are a steelworker with BSPS benefits, you can sign up for a session on Wed/Thurs 8/9 here. Further sessions are planned for Scunthorpe and Redcar. Please do not sign up if you are not a BSPS member.
Advisers
Thanks to the advisers who’ve been in touch over the week offering your services, I will be spending the weekend with Al , working out who to promote and how to promote your services.
To be clear, we are looking for pension advice on BSPS benefits as well as execution. I have been accused of a bias against transfer execution, partly because I chose not to execute myself. I do subscribe to Mr Cunningham’s view, that you have to feel you have a special need to transfer, but I do not suggest that anybody should be excluded from transferring (who has that right), As my colleague Peter Shellswell told me yesterday “we are all special”.
Nor do I fully subscribe to the view of my friend John who sent me a link to the FCA’s guidance on transfer redress (FG 17/9) with a note
Who in their right mind would take on the commercial risk in exchange for a trivial fee
The FCA are fairly brutal in their assumptions, for instance redress will mean an adviser will only be able to write off the first 0.75% of any charges taken since receipt of money (effectively rendering themselves underwriting the charge cap). The actuarial factors involved within the paper look firmly set on the side of the person getting redress. As the FCA says
The basic objective of redress is to put the customer, so far as possible, into the position they would have been in if the non-compliant or unsuitable advice had not been given or the breach had not occurred.”….
The redress calculations, detailed in the document, should reflect the features of the customer’s original DB pension scheme … this would include, for example, different tranches of pension increase rates and deferred revaluation rates.
Peter Shellswell know only too well how onerous a task it is to calculate this redress, how expensive the redress becomes and on whom the burden of redress falls.
Those who enter into advising on DB transfers and executing transfers need not be out of their right minds, but they need to properly understand that execution carries risk. We would not want to jeopardise any adviser’s livelihood by promoting them where we did not feel they were competent.
UPDATE
BSPS have produced a technical note for advisers which can be found here. It has a lot of useful guidance on how to think about BSPS2 as an option.
Members
Despite some recent relaxation in the original tPR stance (which was fundamentally anti-transfer) both the FCA and tPR start from a default position which is that members are better staying in a defined benefit scheme.
Clearly members of BSPS are in a special position. BSPS2 is not as generous as the Scheme they are currently in , nor is the PPF. There are concerns about the future solvency of BSPS2 , especially where the covenant of the sponsor is seen to be weak.
There are concerns that once a member is in the PPF , he or she loses the right to a transfer value and further concerns that transfer values from BSPS 2 are likely to be lower than BSPS. There are even concerns that the recent fall in interest rates will reduce CETVs between now and the end of Time to Choose.
There are counter arguments to all these concerns. If members go to the two BSPS group sites on Facebook – entry heavily moderated- they can see the conversations between other members. The arguments are extremely well laid out on the Time to Choose website and their is an excellent FAQ Facebook page for general use , which can be found here.
Detailed information on the BSPS scheme can be found here and specific help on the choice itself is martialled on the Time to Choose website , set up for members in the period of choice – till 11th December.
In addition, TPAS have put up some very useful information on its website, which is free for BSPS members to use and can be found here.
Public awareness
As part of all this, I’m turning over the Pension Play Pen lunch on Monday, to a discussion of the choices facing steelworkers, people who turn up to the Counting House on Monday will be able to put themselves in the position of steelworkers and find our for themselves how tough those choices can be (details here).
There should be considerable public concern that the outcome of the current decision making is a good outcome – e.g. it delivers to the reasonable expectations of BSPS members.
I don’t think that most members can fully understand their choices without financial advice and I am not competent to give that advice myself. However, along with my colleague Al Rush, I think we can help people to understand what good advice looks like and help people get value for money for the advice they pay for.
I hope that as a result of a few days fun work, we will see a few more messages like this
Hello Henry, I am one half of the lovely couple from scunny Al Rush referred to. I met al thru an online bike forum and have had two meetings with him to discuss my options. I feel that I have found an excellent IFA.I have followed your comments regarding BSPS and would like to thank you for your input. It’s a minefield for us steelworkers with no knowledge of finance. I shall be at your meeting in scunthorpe.Cheers
To sum up
- We am not anti financial advisers ,we are pro good advisers
- We are not anti transfers ,we are pro well-informed transfers
- We are not anti Tata, BSPS, BSPS trustees
- We are pro the restoration of confidence in pensions
Hennry best wishes for your campaign we should all support efforts to restore faith in pensions and assist with the numeracy required to understand the issues. Scaremongering and division only drives the members into the arms of Crooks.
Happy to assist with any member particularly with promised benefits over £50,000 per annum and over 50 years of age. No fee for first meeting for those who have already had guidance Offices in City of London and Derby Chartered Advisers and pensions transfer specialists My own experience (since 1973) is the longest the shortest 10 years
Just like the person from Scunthorpe, I too would like to thank you for your efforts to educate and inform BSPS members, Henry.
Whilst there are people like yourself and Mr Rush active in the pensions ” industry “, my faith will not be completely eroded, clearly intergrity and principle still remain therein.
Henry,
Have to applaud any efforts to help educate and inform members (and anyone else) about the risks and options around DB transfers to enable better decisions to be made.
I am also aware that this is a very sensitive area – with the FCA, members and the BSPS.
I am confused though about what you are offering – your honesty around your status is to be congratulated “I am not competent to give that advice myself”
So I have a concern about what qualifies you to determine an adviser/firm as good or not good – isn’t that a role for the FCA via their permissions?
Do you run the risk of effectively holding out yourself as an inducer to DB advisers – or even a DB adviser by association? Do you need permission for that?
What is the assessment criteria you are using to make your assessment of “good” and “bad” adviser – again isn’t this a role for regulators with permissions and file reviews?
What is your message to those firms that you don’t rate – as you are promoting the “good ” firms/advisers what will this say about those that don’t make the grade – or you don’t screen – are you reviewing every IFA in the UK?
When you run presentations what qualifies you to deliver them – you already acknowledge that you are not authorised (well done) – but won’t that confuse the audience when you point to an adviser? Worse would the FCA determine that you are giving advice or promoting an advice service that you are not qualified to deliver?
What redress will a member have if the advice given by one of your “good” advisers (to transfer or not transfer) results in a complaint?
Would publishing a guide to the information needed to help make decisions be a better route?
Or a guide to the questions a member should ask an adviser – SPS, Qualifications, Expertise, Experience etc?
Very best
Dan
Dan – at some point – we have to stop worrying about covering our arses and actually stick our necks out and speak with conviction. Good advisers are easy to spot by what they don’t do, the pages of this blog are full of my conviction about what is good and what is not and I intend to deliver the same message to steelworkers as I do here. Do good work advisers – and you will get used!
As events are turning out, our trip seems to be getting the FCA into action in Wales and hopefully the North East too. In the gloom the gold gathers the light about it
Henry
I have received the following enquiry and wonder if you can help with any information please?
> We had a member of the British Steel Pension Scheme of the phone yesterday who > feels that he is unable to make a decision on which pension to go into until > the government makes a decision of the Bridging Pension¹ when entering the > PPF. > > This particular customer retired from British Steel at 58 and will therefore > face the 10% reduction on entering the PPF but will currently receive the > Hi/Low (Bridging Pension) for the rest of his life. However, if the government > change the Bridging Pension rules for the PPF he may be better off going into > the new BSPS > > The customer wants to know if the closing date for making their decision can > be moved from the current date of 15th December to a date after the government > have agreed on the Bridging Pension within the PPF. > The Following text is taken from the BSPS website promised more information > before the deadline: > We expect that the Government will change PPF benefits for pensioners with > high/low arrangements before the current scheme starts moving into the PPF. If > you¹re directly affected, we understand that you may want to be sure about the > change, or to know more about it, before you choose your option. So we will > write to you once we know more, and in good time before the deadline for > choosing your option. > http://www.bspensionschoose.com/docs/newsletters/Expected%20change%20to%20'hig > h:low’%20pensions.pdf > > As this has not happened the customer wants to know what the legal position is > regarding moving the deadline to a date after they know the outcome of the > government¹s decision on the Bridging Pension within the PPF. Kind regards
Ian
Thanks Ian, I can only suggest that the member holds on and defers taking a decision until the situation is clearer. He has up and to the 11th December and he is not alone. The situation has to be clarified within the next few weeks and not after 11th December (unless the Hi/Low members get an opportunity to reverse the decision if their choice no longer seems the right one).