Around 700,000 cases have yet to be resolved in phase two of the pensions mis-selling review. The FS...
Around 700,000 cases have yet to be resolved in phase two of the pensions mis-selling review. The FSA is now setting a target of 2002 for completion.
The regulator has identified that 900,000 phase two cases need to be resolved after the passing of the deadline of March this year for people who believe they have a case to make themselves known to the regulator.
Around 190,000 cases have already been completed for phase two, which covers investors who were aged 35 or under when they took out a personal pension. So far approximately £1bn in redress has been paid out to investors. It is anticipated that individually, those that fall under this review may be entitled to £4,000 or more in redress.
All but a handful of the 700,000 priority pensions review cases have been completed, which cover investors who have died or retired, and around £3.4bn in redress has been paid.
The pensions mis-selling review began in 1993 when it became clear that thousands of investors had either transferred out of occupational schemes into a personal pension or passed up the opportunity to join an occupational scheme to take out a personal plan when their pension benefits would have been higher if they had invested in a company scheme. Yet by 1997, of the 560,000 cases that had been identified, only 15% had been completed with only £60m of redress paid to investors.
The pensions review department of the FSA has around 220 staff and the division also runs two helplines with one targeted at the public and the other aimed at regulated firms.
The FSA has spent more than £10m in a publicity campaign, launched in January 1999, in support of the second phase of the pensions mis-selling review.
In the FSA's May pensions review bulletin, the authority states that a number of reviewing firms have stated there have been delays in the making of an offer of redress and the acceptance of the investor concerned.
Guidance from the PIA has suggested that firms should allow investors a minimum of four weeks to consider an offer of redress. If within four weeks of the offer being made, the investors do acknowledge they are actively considering the offer or taking further advice, the firm is expected to continue to allow time for the investor to make an informed decision.
Firms have also reported a number of exceptional cases to the authority, including not being able to locate the investor in question or cases where the investor refuses to communicate with the reviewing firm on the matter.
The FSA has issued guidelines to firms on how to handle such exceptional cases, or IFAs can obtain more information on the authority's website at www.fsa.gov.uk, in the pensions review section.
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