On 3 August 2016, the FCA released a press statement regarding their intention to consult this autumn on the methodology used to calculate the levels of redress due in cases of unsuitable advice on transfers from defined benefit (DB) occupational pension schemes to personal pensions.
The consultation is to look at what improvements can be made to the redress methodology, which has been in use in its current form since the Pensions Review in the 1990s. The methodology was designed to put customers back in the position that they would have been in had they stayed in the DB scheme, but the FCA press release notes that it “may no longer achieve this objective”.
The FCA has confirmed that for ongoing complaints and complaints received before the outcome of the consultation is known, companies should continue to comply with the current complaints handling rules and pay redress utilising the current methodology (though not be on a full and final basis), until the outcome of the consultation is known. It suggests utilising other options to deal with the complaint in the interim.
The FCA intends to reach conclusions by spring 2017.