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online technical resource

redress for pension mis-sale cases that fall outside the Pensions Review

Please note this technical note is in the process of being updated in light of the outcome of the FCA’s consultation on pension redress methodology.

This technical note explains how — since 1 October 2005 — we have dealt with redress for complaints about pension sales that fall outside the period covered by the regulatory "Pensions Review". We take a different approach to these complaints because they are not a “closed” group relating to a specific fixed period, as Pensions Review cases were.


For the Pensions Review, the regulators at that time (the PIA and subsequently the FSA) laid down a methodology and assumptions (for example, the discount rate to be used to value future benefits) which the regulator revised from time to time — for the last time in April 2003.

The Pensions Review has now drawn to a close. And the FSA's Pensions Review Bulletin 27 announced that — unless exceptional circumstances arose — it would not be updating those assumptions last revised in April 2003. It said that firms should continue using those assumptions for Pensions Review cases, regardless of the future date of settlement.

This raised the issue of what approach firms and the ombudsman service should take for similar pension cases falling outside the boundaries of the Pensions Review. We liaised with the FSA about this. Given the relatively small number of customers with outstanding cases, the FSA decided that it was not appropriate for it to sponsor the updating of the assumptions.

However, the ombudsman service and the Financial Services Compensation Scheme (FSCS) agreed that there would be benefits for all concerned if there was greater certainty about the methodology and assumptions that should be applied — in cases outside the boundaries of the reviews.

And so the ombudsman service invited the chairman of the (then) Investment Liaison Group (on behalf of the financial services sector) and the chairman of the Financial Services Consumer Panel (on behalf of consumers) to nominate an expert each to provide input.

The ombudsman service, the FSCS and the two experts met and agreed to commission updated figures from PricewaterhouseCoopers, who had previously advised the FSA on appropriate assumptions for the Pensions Review.

With effect from 1 October 2005, redress in pensions cases that fall outside the Pensions Review has normally been based on the assumptions reviewed annually by PricewaterhouseCoopers.

most recent review of assumptions: 1 July 2016

PricewaterhouseCoopers has reviewed the assumptions that should be used for future pension mis-sale cases that fall outside of the Pensions Review. Its latest report recommends assumptions from 1 July 2016. These assumptions apply for calculations of:

(a) prospective loss, and
(b) redress.

Please note these assumptions won’t be updated in July 2017, pending the outcome of the FCA’s consultation on the pension redress methodology. The FCA has said that, where redress is due, a complaint should not be settled on a ‘full and final’ basis until the outcome of the consultation is known.


All calculations done in the period from 1 July 2016.

"as at" date

All calculations of prospective loss and redress for prospective loss carried out in this period, and the value of all personal pensions, should be carried out as at 1 July 2016.

earlier reviews of assumptions

PricewaterhouseCoopers previously reviewed and reported on these assumptions on the following dates:

This is part of our online technical resource which sets out our general approach to complaints about a wide range of financial products and issues. We would like your feedback on how helpful you found it. Please also use the feedback form below to tell us about anything you think we could clarify or explain better.