GAD has carried out a quality assurance exercise into methodology on a report on the British Steel Pension Scheme
Specialists at the Government Actuary’s Department (GAD) have undertaken a quality assurance (QA) exercise of methodology in a report related to the British Steel Pension Scheme (BSPS). When the BSPS was restructured in 2017, members were offered 2 options.
They could either:
move to a new scheme on the same benefits but with lower future increases
remain in the BSPS and receive a reduced pension from the Pension Protection Fund (PPF)
Members who stayed in the BSPS will now have benefits insured outside the PPF that will result in an uplift on the PPF benefits.
Other members transferred to a defined contribution pension scheme. People who received non-compliant pension transfer advice suffered financial loss as a result.
Redress Scheme
The Financial Conduct Authority (FCA) published policy statements and set out rules for a redress scheme for these people.
It built a calculator that firms must use to assess the loss that members are owed under the redress scheme. It also prepared a Technical Report describing the calculation methodology.
GAD’s Involvement
The FCA commissioned GAD to review this Technical Report. We were asked to confirm the methodology was consistent with the policy statements and benefit structures set out in the BSPS rules.
The QA work was undertaken by GAD pensions experts, who examined the technical modelling aspects of the work.
GAD has confirmed the Technical Report appropriately reflects the FCA’s guidance and the features of the BSPS arrangements.
Actuary Mark Shaw led on the QA of the Technical Report. He said: “GAD’s work has provided reassurance to both the FCA and former BSPS members. The Redress Calculator can be relied on to calculate the redress for former members, in accordance with the FCA’s policy statements.”