Nikhil Rathi, chief government of the Monetary Conduct Authority (FCA), is to face questioning from MPs as a part of the Public Accounts Committee’s inquiry into the British Metal Pension Scheme switch scandal.
MPs began their investigation following the publication of a damning report into the scandal by the Nationwide Audit Workplace (NAO) final week.
A raft of monetary recommendation companies that gave poor recommendation to BSPS members seeking to switch their pension out of the BSPS scheme have now collapsed.
Compensation prices have but to finalised however the NAO estimates that 263 BSPS members have misplaced £18m of redress to this point with some particular person losses close to £500,000.
Mr Rathi will likely be joined in entrance of MPs by the chief executives of the Monetary Ombudsman Service and Monetary Providers Compensation Scheme.
The Committee will query them on the actions the FCA “has undertaken to control monetary recommendation within the BSPS case, its plans for supporting steelworkers who could also be entitled to redress, and the extent to which compensation is being delivered”.
A date for his or her questioning has but to be set.
The Committee has requested that anybody affected by the scandal submit proof by Wednesday 20 April.
The FCA has to this point issued £1.3m of fines and has 30 extra enforcement investigations ongoing.
It has additionally modified its strategy to regulating the pensions recommendation market in response to the BSPS case. From 2018 it started amassing extra information from monetary advisers and has modified the way in which it engages with regulatory companions, reminiscent of creating a joint protocol to allow early intervention in DB switch circumstances and banning prices the place advisers are paid provided that a switch proceeds.
The FCA is but to resolve whether or not to implement a shopper redress scheme for BSPS members, through which all companies concerned must overview their recommendation and doubtlessly provide compensation. The FCA should collect proof to fulfill authorized assessments earlier than it could actually implement this scheme.
The regulator began assessing the suitability of a shopper redress scheme in April 2021 and expects to launch a session on this by the top of March.
A complete of 263 pension scheme members have misplaced £18 million of redress to this point as a result of monetary advisers have gone into liquidation and there are limits to the compensation that may be offered, in keeping with the NAO report. Some 22% of complaints made to the Monetary Ombudsman Service (the Monetary Ombudsman) have been handed to the Monetary Providers Compensation Scheme (FSCS) as a consequence of companies being unable to pay compensation.
The common loss for BSPS claims resolved by FSCS is £82,600, with particular person losses starting from £0 to £489,000. The FSCS’s compensation restrict for recommendation companies that failed after April 2019 is £85,000.