Thursday, 15 February 2018

Britain is no country for old steel workers like Richard Bevan, fleeced of their British Steel pensions by financial vultures

In 1967 Harold Wilson's Labour Government used its power to take the independent steel makers in Britain into public ownership as 'British Steel' and in 1988 Margaret Thatcher's Conservative Government sold it off again as the privatised 'British Steel plc', whose workers continued to pay into the British Steel Pension Fund. The company merged with Koninklijke Hoogovens to form the 'Corus Group' in 1999 and in 2007 Corus itself was taken over in 2007 by the Indian steel operator, 'Tata Steel.'

In 2017 Tata announced a restructuring of inherited £14bn British Steel Pension Fund to keep its loss-making operations in Britain afloat.

These are the small number of big movers whose actions have affected thousands of small lives.

* * * * * * * 
Parliament's 'Work and Pensions Select Committee' has now published a Report which deals with  the closure of the British Steel Pension Scheme. Apparently, the average British Steel retirement saving was £400,000, per pensioner, although, in around 20 cases, the transfer value was in excess of £1million. The Committee found that many retirees were 'shamelessly bamboozled' into transferring hundreds of thousands of pounds into risky products and in the process netting so-called advisors' chunky payouts with fees as high as 10% . They were 'exploited for cynical personal gain by dubious financial advisers in tandem with parasitical so-called ‘introducers.’'

The Committee Chairman, veteran MP Frank Field, said : "We're not sure of the full extent, but we've certainly got evidence and presented evidence, in the Report, that there are not just a few occasions where this has occurred and there have been people who probably have been fleeced of the most valuable asset they will ever had, which they would have built up as part of their pension scheme. Some have been entitled to a million pounds drawing down of which the financial vultures have been after and in too many cases, been successful in getting their claws on."

Richard Bevan who has been working in the steel industry for almost 40 years, most recently at Tata's Trostre Plant said he turned to a local company to discuss what to do with his pension savings once it became clear that Tata's British Steel Pension Scheme would close. Apparently, he was advised to leave the scheme even after he had received a communication from the Pension Fund advising him that a revaluation was under way which could mean he had much more in his savings pot than previously thought. He now thinks that he was misled and told BBC Wales he has lost almost £200,000 by transferring out of the Pension Scheme.

The Head of Policy at Hargreaves Lansdown, Tom McPhail said : “It is extraordinary that even after the pension mis-selling scandal of the 1990s, the members of the British Steel scheme could be let down so badly. The scheme trustees and administrators should surely have taken more responsibility for protecting members interests and shielding them from unscrupulous advisers. Contingent charging, where the adviser is actively incentivised to recommend a transfer, creates a glaring misalignment of interest between adviser and their client; it would be remarkable if it didn’t lead to at least some mis-selling.”

One would think that the evidence proving the exploitation of these old pensioners was irrefutable, but :

* despite the fact that the Committee concluded communication to British Steel pensioners over switching their pension pots was 'woefully inadequate', the Trustee of the scheme rejected this  conclusion and said it was 'not supported by the evidence' and 'all members were provided with enough information to make good choices.'

* The Pensions Regulator also rejected some of the Report's conclusions and a spokesperson said it : “helped tackle unscrupulous financial advisers who were exploiting the situation.” “We went to Port Talbot and took part in a discussion forum with scheme members and others. We reviewed communications sent to members and were satisfied they adequately warned of the dangers of transferring out of a defined benefit scheme.”

* ex-Pension Minister, Steve Webb, urged authorities : “not to throw the baby out with the bath water. The obvious lesson is that you clamp down on the crooks and scammers, not that you clamp down on pension freedoms.” 

"The pension's got to last me the rest of my life."
ex steel worker Richard Bevan

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