The ABI and Aifa are disputing the FSA's guidance for calculating redress for pension mis-selling, s...
The ABI and Aifa are disputing the FSA's guidance for calculating redress for pension mis-selling, says a story in this Monday's Investment Week.
In light of this, both groups are also claiming their members will not be able to provide redress for mis-selling by the regulator's target date of December 2002. The issue centres on the landmark Needler v Taber court case from last summer, and the FSA's interpretation of its consequences differs from legal opinion supplied to several life offices, according to Aifa.
The case of Needler v Taber concluded that windfall benefits of a demutualisation - in this case Norwich Union - should not be taken into account when calculating redress for pensions mis-selling. The ABI and Aifa are concerned that the FSA's interpretation goes wider than this, extending beyond windfall benefits, which were covered by the case, to include the reallocation of orphan assets, topping up bonuses and policies.
The FSA's view is included in draft guidance to intermediaries, consultation paper 126.
If the FSA's interpretation remains, this would be time consuming for intermediaries and create further work, making even the extended pensions redress deadline of December far too early, the ABI has said. Aifa is proposing instead that March 2003 is a more realistic deadline.
Our weekly heads-up for advisers
'Nothing can prevent scammers developing workarounds'
Stalwart Scottish Mortgage takes third place
Consistency and compliance vs. slower reaction time
Search for replacement to begin imminently