The UK's Financial Conduct Authority (FCA) is to start a review of its defined benefit (DB) transfer redress guidance by the end of the year, the regulator has confirmed.

The financial watchdog said it would set out its expectations of firms while the review is ongoing, including clarifying how firms should apply or interpret the guidance in particular areas.

The review will focus on finalised guidance 17/9 (FG/19), which sets out how firms should calculate redress for unsuitable DB transfers. When it was published in 2017 the watchdog committed to reviewing the guidance at least every four years.

The guidance is used by firms to put consumers back in the position they would have been if they had remained in their DB scheme.

It is done by calculating appropriate redress where:

  • Consumers received advice from the firm which was negligent or contravened relevant requirements.
  • If the advice had not been negligent or had complied with the relevant requirements, the consumer would not have transferred all or part of the cash value of accrued benefits from the DB pension scheme into the personal pension scheme.

The FCA said: "The guidance is based on the approach for the Pensions Review of the 1990s, with the assumptions updated periodically since. The assumptions were last updated when we published FG17/9 in 2017, to take account of changes in the pensions environment.

"If we decide to make further changes to the guidance following this review we will consult on these."


The regulator said firms should continue to assess complaints about unsuitable advice fairly, consistently and promptly while the review is taking place.

It added: "As part of the process of preparing for the review, we have identified some areas where firms may also benefit from clarification on how we currently expect redress to be calculated when following the guidance."

The FCA said firms should ensure that they, or any actuarial specialist they have outsourced a redress calculation to, take the following actions when determining the amount of redress to offer.

"Firms not meeting these expectations should make appropriate changes to their processes before issuing any new redress offers.

"Where firms have already carried out calculations that do not meet the expectations in our guidance, it may be appropriate to review those calculations and contact consumers where they determine that additional redress may be due," the statement said.