16 companies have voluntarily agree with the Financial Conduct Authority to cease pension transfers
A pension transfer (as defined by the FCA) is when a defined benefit pension (such as a final salary scheme, or other occupational scheme that guarantees a certain pay-out on retirement) is transferred to an alternative pension scheme, such as a personal pension or a SIPP.
16 new firms have now voluntarily complied with a request from the financial services regulator to cease transferring defined benefit pensions into alternative types of scheme. One of the firms was “required” to comply.
Freedom of Information Request
The information was revealed through an information request and published in Citywire in early Feb 2017, with the FCA requests dating back over the 12 months leading up to January 2017. The question of whether the transfers under scrutiny were related to SIPPs, and therefore potentially part of SIPP mis-selling, for which the FCA answer was that “the number of advice firms that have voluntarily agreed with the FCA not to carry on any activities in relation to pension switches and/or pension transfer to any SIPP was 13”.
More about Transferring your Defined Benefit Pension into a SIPP
Technically, going into a SIPP (A Self-Invested Personal Pension) could be fine, providing they are suitable for the underlying investments and fit other important criteria, for which people should seek independent financial advice, regulated by the FCA.
However, problems can happen when people are persuaded to move defined benefit pensions into SIPPs, which cannot replicate the some of the unique benefits of DB pensions, which the transfer away from is irreversible.
More importantly, some of the people who are advised to transfer into SIPPs are mis-advised, and told to invest in high-risk, non-standard or unregulated investments such as forestry, overseas property, storage pods and more, meaning that their retirement fund is put at much greater risk, often with no protection from the Financial Services Compensation Scheme
Concerned about your DB pension transfer into a SIPP?
With so much going on with pensions at the moment, we wouldn’t blame you.
If you’ve transferred your pension into a SIPP, either from a defined benefit scheme or even just from an ordinary personal pension, and invested in anything unusual or abroad, or simply don’t understand what you’ve invested in, just contact us for a FREE initial assessment of your pension advice from a team of specialists.
We’ve seen it all over the past few years, and should we identify a mis-sold pension, we can offer our claims services to you on a NO WIN – NO FEE basis*!