Organisations that help to protect pensions

The Pensions Regulator

The Pensions Regulator is a government body responsible for regulating workplace pension schemes in the UK.

Its main aim is to promote and improve understanding of the good administration of workplace pension schemes, to protect member benefits.

But they’re unable to help with disputes between individuals and their pension schemes. These situations can be looked at by the Pensions Ombudsman.

Pensions Ombudsman

The Pensions Ombudsman is an independent organisation set up by law.

They can help if you have a complaint or dispute about a pension scheme provided by your employer, or a pension you’ve set up yourself.

They look at the facts without taking sides, and their service is free.

They can also help if you want to complain about a decision made by the Pension Protection Fund or the Financial Assistance Scheme.

However, they can’t help if you have a complaint about the advice or sale of individual pension products. This is because these complaints are handled by the Financial Ombudsman Service.

Financial Ombudsman Service

The Financial Ombudsman Service investigates complaints about the sale or marketing of individual pension arrangements.

If you’re unhappy about the advice you were given about a pension plan, you first need to give the firm who advised you the chance to resolve matters.

The firm will have eight weeks to sort out your complaint with you. If after eight weeks you’re still not happy, you can ask the Financial Ombudsman Service to get involved.

They can also look into complaints about most financial problems involving banking, insurance, mortgages, investments and savings, to name a few.

Prudential Regulation Authority

The Prudential Regulation Authority is responsible for making sure that companies offering financial services, including banks, insurance companies and major investment firms are run properly. And that people using their services have some protection against loss if the company or individual goes out of business.

Financial Conduct Authority

The Financial Conduct Authority (FCA) oversees the conduct of individuals and companies that provide financial services.

If you have a personal or stakeholder pension, or have used your pension pot to buy an income, your provider is likely to be overseen by the FCA.

If you want financial advice, your financial adviser should be authorised by the FCA.

The FCA keeps a register of the firms and individuals it regulates, which you can use.

If your financial services firm or individual adviser is authorised by the FCA, other forms of protection are available for you if you have concerns. These organisations include the Financial Ombudsman Service and the Financial Services Compensation Scheme.

Financial Services Compensation Scheme

The Financial Services Compensation Scheme (FSCS) is the UK’s compensation fund of last resort for customers of authorised financial services firms.

This means that the FSCS might pay compensation if a financial services firm (such as an insurance company) is unable, or likely to be unable, to pay claims against it.

The FSCS is an independent body. If something goes wrong, the FSCS operates different levels of compensation according to the type of investment involved. They protect:

  • deposits
  • insurance policies (this includes any annuity you might have bought with a pot of money from a pension scheme)
  • insurance broking (for business on or after 14 January 2005)
  • investment business
  • mortgage advice and arranging (for business on or after 31 October 2004).

The FSCS might compensate you if you:

  •  were a customer of a company or individual authorised by the FCA
  • the company or individual has gone out of business; and you’ve lost money as a result.

There are limits to the amount the FSCS will pay.

They don’t charge consumers for using their service.

The FSCS don’t cover workplace pensions that are trust-based schemes. If you’re contributing to, or have contributed to, a workplace pension scheme (which is not a salary related scheme) and are concerned regarding the security of your pot, contact the employer or the trustees. 

Fraud Compensation Fund

The Fraud Compensation Fund (FCF) can help if a workplace pension that is a trust-based scheme (sometimes known as an occupational pension scheme) has had its assets reduced due to an offence involving dishonesty.

Trustees, scheme managers, members, scheme beneficiaries, scheme administrators and their representatives can all make an application for compensation.

Any compensation will be paid directly to the trustees of the workplace pension scheme.

The FCF can, under certain circumstances, arrange for compensation to be paid to a pension scheme where all the following conditions have been met:

  • The scheme is a workplace (occupational) pension that hasn’t been excluded from the FCF.
  • The employer has gone out of business or is unlikely to continue in business.
  • The value of the scheme has been reduced because of dishonesty.
  • There’s no possibility that the scheme will receive any funding to cover its loss and all other attempts to seek compensation for the loss must have been tried.

All applications to the FCF have to be made within certain deadlines.

The FCF only applies:

  • when the scheme is a workplace trust-based (occupational) pension scheme
  • and there’s no possibility that the scheme will receive any funding to cover its loss
  • and the employer has gone out of business or is unlikely to continue in business
  • and the value of the scheme assets has been reduced because of dishonesty. 

The FCF is operated by the Pension Protection Fund (PPF).

The Pension Protection Fund

The Pension Protection Fund (PPF) protects people with a defined benefit pension (which includes final salary and career average schemes) when an employer becomes insolvent. If the employer doesn’t have enough funds to pay you the pension they promised, the PPF will provide compensation instead.

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