Open consultation: GC17/1
10/03/2017
Consultation closed
10/06/2017
This is our finalised guidance for firms on how to calculate redress for unsuitable defined benefit pension transfers. The summary of feedback outlines the response to our consultation.
Show summary of feedback received (PDF)
Show FG17/9 - updated March 2022 (PDF)
2 August 2022 update: We are consulting on changes to our methodology for calculating redress for unsuitable pension transfers from a defined benefit pension scheme to a personal pension. Until the outcome of our consultation is known, FG17/9 continues to apply to redress calculations.
In GC17/1, we consulted on guidance to update the methodology used to calculate redress for unsuitable pension transfers from a defined benefit pension scheme to a personal pension. Our proposals resulted from a review of the existing methodology carried out by PricewaterhouseCoopers LLP (PwC).
We updated the finalised guidance on 26 March 2021 to reflect changes to the Consumer Price Index (CPI) inflation measure due to the Government’s decision to change the way that the Retail Price Index (RPI) inflation measure will be calculated from 2030. The updated guidance resulted from a review of the existing methodology carried out by PricewaterhouseCoopers LLP (PwC). As explained in the statement we published on 3 March 2021, the updated guidance applied to all redress calculations from 1 January 2021.
We updated the finalised guidance again on 31 March 2022 with CPI inflation assumptions for use in redress calculations from 1 April 2022 (Annex 2). We also used this update to remind firms of their overarching DISP obligations (paragraph 3). Where the guidance does not address the particular and individual circumstances of a customer’s complaint, firms should have regard to DISP and assess complaints and redress offers fairly, consistently and impartially. This could include, for example, situations where the original DB scheme no longer exists and/or the scheme benefits have been bought-out, and the customer would have been entitled to these alternative benefits if they had received suitable advice. It could also include how a firm should establish the customer’s retirement date where it is unclear if the age at which the customer has started to access their transferred pension benefits is the same age at which they would have accessed their DB scheme benefits.
This guidance may directly impact on:
The guidance contains assumptions which respondents should use to calculate appropriate redress. Assumptions should be updated quarterly in line with the guidance.