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British Steel trustees are cleared by The Pensions Ombudsman

The Pensions Ombudsman has rejected a number of complaints against the trustees of the embattled and collapsed British Steel Pension Scheme (BSPS).

The Ombudsman has given final consideration in four lead cases, after accepting 229 complaints in March last year. While each case was individual and differed slightly, all included a point about the lack of information given to members concerning cash equivalent transfer values (CETV) and/or early retirement factors (ERF).

They concluded that the trustees were proactive in providing information which was clear and well explained and noted that it was not misleading (and was not intended to be) and did not amount to scaremongering.

At the time, reports emerged that BSPS members received poor communications, which tried to outline the issues and developments of the Scheme restructure and expressed that “no action was required” which sparked no concern or interest from the members. 

The complaints follow the long-winded fallout of poorly advised Defined Benefit (DB) pension transfers to members of the old BSPS Scheme, who in 2017 were given the choice of staying in the original Scheme and going into the Pension Protection Fund; moving to a new Scheme with better benefits - BSPS2; or transferring out of the Scheme all together.

As a consequence, the calculation methodology behind CETVs and ERFs was changed on 1 April 2017, with the result that members who requested a transfer value or retired early from the old Scheme after that date, received significantly higher benefits than those who had already transferred out or taken early retirement.

The case illustrates the difficulties faced by the trustees in trying to explain what can be complex and fast-moving issues, and the difficulties faced by members in trying to understand and act upon the information they receive.

An independent review into the handling of the BSPS scandal, highlighted that trustees could have done more to direct BSPS members to regulated IFA’s, as some Scheme members were targeted and pressurised into transferring their money into dubious investment Schemes by unscrupulous, unregulated financial advisers.

It also stated that it was clear that some members of the BSPS had suffered as a result of inadequate communications, rushed timescales or bad advice, but that it was important to look at the issues in context to make sure industry regulators and trustees learn how to protect members involved in future pension Scheme restructures.

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