Good progress made in the pensions review, but laggards beware

John Tiner, Consumer Investment, Insurance Director commenting on progress said today:

"Even though there are nearly one million people who have received compensation, firms must keep their shoulder to the wheel and ensure they make offers and settle redress to the two hundred and fifteen thousand people still outstanding, and that they do this fast."

"Those laggards who fail to complete on time should beware, as we know exactly who the firms are and we will take action against those firms. One of the areas of great concern is the poor progress of some of the smaller IFAs. Today for the first time we have imposed phase 2 fines on IFAs for failure to make adequate progress and there are more in the pipeline."

Despite the overall steady progress firms need to continue to focus efforts on all types of cases. Greater progress has so far been made on transfer cases than on the potentially more difficult opt-outs and non-joiners. Firms do not need reminding that the 30 June 2002 deadline applies to all types of case.

Mr Tiner went on to describe how the shape of the FSAs new regime owes much to the hard lessons learnt in the past from episodes such as pension mis-selling.

"Lessons from the past have shown that operating a system designed to identify problems at an early stage and arming consumers with better information is vital. The new regulatory environment therefore places more emphasis and resources on early

detection and the mitigation of problems, using tools such as theme work and mystery shopping to provide early warnings. Firms will face tough penalties if they dont manage the risks properly or take their responsibilities to customers seriously."

Notes for editors

1. John Tiner, was speaking today at the CII Society of Fellows Annual Lecture and Fellowship graduation ceremony @ Insurance Hall EC2.

2. The personal pensions mis-selling review is aimed at people wrongly sold personal pensions between 29 April 1988 and 30 June 1994. Mis-selling occurred when people who would have been financially better off at retirement in their employers pension scheme were advised to leave or not join their employers pension scheme (opt-out and non-joiner cases), or where they transferred pension benefits from a previous employers scheme and out a personal pension plan instead. The priority phase of the review of mis-sold pensions involved older consumers at or near retirement. Phase 2 extends the review to younger consumers, typically in their 30s and 40s.

3. Details of progress of phase 2 of the Pensions Review (based on September 2001 returns) :

	Total	Product Providers and Bancassurers	Networks and Large IFAs	Small IFAs
Requests for Review	1,241,908	1,082,850	100,466	58,592
Cases for Review (a)	845,561	749,241	59,939	36,381
Assessments complete 630,000 564,172 44,467 21,361 (offers made plus cases where no redress due)	630,000	564,172	44,467	21,361
As a % of (a)	74.51%	75.30%	74.19%	58.71%
Offers made	512,064	466,423	36,509	9,132
Offers accepted	453,505	411,134	34,013	8,358
Amount of redress accepted	3,931m	3,476m	373m	81m



4. In Phase 1 of the review 421,000 investors have been offered redress. Redress offered and accepted (excluding the value of unconditional offers of reinstatement and benefit guarantees) amounts to just under 4 billion.

5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

6. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.