If your business advised a former member of the BSPS to transfer their pension out of the scheme, here’s our guidance on what to do if they complain about that advice.
We also give general information about the FCA’s redress scheme. This includes the deadlines you need to meet and what we’ll check when a consumer complains to us during the scheme.
Information about the BSPS redress scheme
From now, we expect that most complaints we receive will be about financial firms’ decisions during the BSPS redress scheme.
The FCA’s rules require you to assess the advice you gave on all cases that fall under this scheme. Financial businesses that gave unsuitable advice will need to calculate if the consumer has suffered a financial loss. If so, they need to then pay them compensation under the scheme. To work out compensation, the FCA has said that firms will need to use the FCA calculator.
If a consumer isn’t happy with how their case is being handled under the scheme, they can complain to us at any stage of the process.
Deadlines you need to meet during the redress scheme
You should have told the former BSPS member whether they’re in scope of the scheme by 28 March 2023.
You need to have reviewed the advice you gave the BSPS member and told them whether it was suitable by 28 September 2023.
If you owe redress to the consumer, you should write to the consumer with an offer of payment:
- if the consumer’s requested a lump sum payment, this should happen by 28 December 2023
- if the consumer’s requested a payment into their pension, this should happen by 28 February 2024
The consumer has three months from the date of the offer to accept it. If they accept the offer, you must pay them within 28 days.
What about existing complaints?
If a complaint is already with us, we’ll continue looking at it and will contact both you and the consumer when we have an outcome to share.
You should let the consumer know that these complaints are out of scope of the redress scheme. They don’t need to do anything.
Leaflet for consumers about our role in the redress scheme
We've created a leaflet for consumers that explains how the BSPS redress scheme works, as well as how the Financial Ombudsman Service can help.
You can download the leaflet here (PDF 106KB), ready for you to hand to consumers who ask for more information about our role.
When can consumers raise a complaint?
If a consumer isn’t happy during the redress scheme, you should let them know that they can refer a complaint to us.
As mentioned above, they can raise a complaint at any and each stage of the redress scheme – even if they complained to us at an earlier stage of the scheme.
When they think they should be in scope of the redress scheme
If you’ve told the consumer that they’re out of scope and they disagree, we can check that you’ve worked this out in accordance with the scheme's rules.
When they’re not happy about your advice review
For all BSPS members who are in scope of the scheme, you need to review the advice you gave and let them know whether it was suitable.
They can complain to us if they’re not happy with the outcome. We can check that the review was carried out in accordance with the scheme's rules.
If they’re not happy about your redress calculation
If the advice you gave was unsuitable, then you need to work out how much redress you owe to the consumer.
You should write to them with this figure, letting them know how you worked it out. If they’re not happy, they can complain to us. We’ll check the calculation against the scheme’s rules.
If they agree they’re not in scope but still want to complain
If the consumer agrees that they’re not in scope of the scheme, they might still want to complain about the advice they received to transfer.
We may be able to look at what happened under our usual complaints process. They will need to complain to you first and receive a final response letter.
What we look at
We’ll check that you’ve applied the FCA’s rules for the redress scheme correctly.
If we’re looking at a complaint that’s not in scope for the redress scheme, we’ll look at whether the advice you gave to transfer out of the BSPS was suitable. If it wasn’t, we’ll ask you to calculate whether the consumer suffered a financial loss.
Handling a complaint like this
Throughout the scheme, you need to write to consumers to let them the outcome of your decisions. You must use the template letters in CONRED 4.
When you’re confirming a decision, you should include a form that makes it easy for the consumer to complain to us if they’re not happy.
If you’re looking at a complaint about advice to transfer that’s outside of the redress scheme, read more about resolving complaints before we get involved.
Putting things right
If we find that you haven’t applied the redress scheme’s rules correctly, we could tell you to change your decision.
For example, you might review the advice that you gave and find that it was suitable. But the consumer might disagree and then complain to us. If we then find that you didn’t review the advice in accordance with the scheme’s rules, the case can be moved onto the next stage – the redress calculation.
How is compensation calculated for non-scheme cases?
This is for complaints already with us, or those that don’t fall under the scheme.
If we think the consumer was given unsuitable advice, we’ll tell you to work out whether they suffered a financial loss as a result.
This is calculated by comparing the value of the benefits they would have had with the workplace pension against those they actually have now in their personal pension.
If they’ve suffered a financial loss, we’ll tell you to pay compensation to their pension plan – or if that’s not possible, directly to them. We might also tell you to compensate the consumer for any distress or inconvenience.
The FCA’s tools for firms page has detailed information about the tools that firms need to use during the redress scheme, as well as supporting documents.
Who can I contact if I have more questions?
If you have any questions, you can contact us at our Business Support Hub.