The current redress methodology for DB transfers used in the industry and by the Financial Ombudsman Service (Fos) was originally developed for the Pensions Review of the 1990s.
It was intended to put consumers back in the position they would have been in had they stayed in their DB scheme.
However, the FCA is concerned that this may no longer be achievable using the current methodology.
It will launch a consultation on the best way to change the system in the autumn that will conclude in spring 2017.
Complaints in progress
Any firms dealing with such complaints before the consultation closes should comply with their obligations under the complaints handling rules, the FCA said.
Therse are namely; investigate the complaint competently, diligently and impartially, and assess the complaint fairly, consistently and promptly.
If, however, redress is needed under the current methodology before the consultation is concluded; the FCA said that it would not be fair for the firm to attempt to settle the complaint on a ‘full and final’ basis until the outcome of the consultation is known.
The firm would have to write to the customer to explain why they are unable to provide a final response.
DC delays
DC pension savers don’t seem to have been getting an easier ride, however, with 38% of those trying to transfer old or closed pension funds having faced delays or problems, according to new research from MetLife.
A fifth (21%) of respondents said that their old scheme was reluctant to provide them with help, while 17% claim that their old provider was delaying the transfer.
Research found 17% of workers saving into a scheme don’t even realise they were able transfer a fund from a previous job, while an additional 10% said they don’t know how to do so.
Findings further show that another 14% think the process is “complicated and confusing”.
Gender gap
Women are more likely than men to not know about pension transfer options. Around 20% of women compared with 13% of men said they didn’t know they could transfer a scheme into a new employer’s pension plan.
The pattern is the same when it comes to not knowing how to carry out such a transfer, with 12% of women admitting this compared to just 7% of men.
Pensions dashboard
This knowledge gap is one of the reasons MetLife is backing the Association of British Insurer’s (ABI) Pension Dashboard, which would put all of a pension saver’s information in one place.
Simon Massey, wealth management director at MetLife UK said: “Over the last few years, huge steps have been made to reduce transfer times which is excellent news for customers and goes some way to tackling the problems of those who may have experienced lengthy transfer delays in the past.
“However there is more to do to improve people’s understanding about their pensions and the options available. It’s much easier to keep track of one retirement pot rather than numerous smaller ones and anything that makes it easier for people to transfer must be encouraged, and the Pensions Dashboard goes a long way to help achieve this.
“The importance of getting it right first time with pensions cannot be overstated – you only get one chance to build up a retirement pot. People should seek expert advice when it comes to their retirement – it will empower them to remove any obstacles when it comes to pensions transfers.”
