The Financial Conduct Authority will not set up a redress scheme for members of the British Steel Pension Scheme for the time being.
According to the FCA’s board meeting minutes for 21 and 22 July, published earlier this week (September 7), discussions were held around the available options for securing redress for scheme members.
One option could have been to implement a consumer redress scheme, akin to the one set up for Arch Cru victims in 2012, which compensated investors for unsuitable advice to invest in Arch Cru funds.
But the board decided against this for the time being.
The minutes read: “The board discussed the benefits and risks of these options and considered the additional information that would be required to enable decisions to be taken about whether any further redress proposals should be pursued and the importance of any such proposals being rooted in the organisation’s strategic objectives.
“It was noted that the board did not currently have sufficient information to take any such decisions.”
Instead, the board said it “supported enhanced engagement activities” with BSPS members while file reviews were conducted to establish a more detailed evidence base on which to make future decisions.
It also supported closer discussions with the government about policy in this area.
The board had discussed the specific circumstances surrounding the BSPS, the FCA’s activity to date to support members who received unsuitable advice, and the case for further intervention.
This month the FCA is due to travel to Swansea to meet steelworkers who could be due compensation after receiving unsuitable advice to transfer out of their pension scheme.
The City watchdog is being joined by the Financial Ombudsman Service, the Financial Services Compensation Scheme, and MoneyHelper to hold one-to-one sessions for those who transferred out of the British Steel Pension Scheme.
In recent months, the regulator has been under pressure to confirm compensation is given to BSPS members affected, with Labour MP Nick Smith raising concerns with the Financial Ombudsman Service over its “far too slow” decision making processes.
The FCA has repeatedly reached out to steelworkers, urging them to bring a complaint if they feel they were misadvised.
Lawyers working on behalf of the steelworkers have warned BSPS redress could cost the industry £300m.
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