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.
1 September 2021 update: We announced the start of a periodic review of the guidance and set out what we expect of firms while the review is ongoing, including clarifying how firms should be applying or interpreting the guidance in certain areas.
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 way that the Retail Price Index (RPI) inflation measure is 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 should be used for all redress calculations from 1 January 2021.
Who this applies to
This guidance may directly impact on:
- consumers who were given unsuitable advice to transfer out of a defined benefit pension scheme to a personal pension
- firms that provide advice on transfers from defined benefit pension schemes to personal pensions
- software providers for these calculations
- professional indemnity insurers
The guidance contains assumptions which respondents should use to calculate appropriate redress. Assumptions should be updated quarterly in line with the guidance.