On the go: Regulators have warned current and former employees of P&O Ferries “not to make any quick decisions” with their defined benefit pension following mass redundancies.
Given the “heightened risk” of pension transfers following recent redundancies, regulators said transferring out of a DB pension scheme is “unlikely to be in the best interests of most people”.
The warning was issued by the Financial Conduct Authority, the Pensions Regulator, and the Money and Pensions Service on April 12.
The announcement said TPR is liaising with the trustees of pension schemes associated with P&O Ferries to “closely monitor” transfer requests.
In the meantime, the FCA pointed current and former P&O employees to impartial guidance from MoneyHelper, which is run by Maps.
It said those seeking financial advice should first check whether the adviser is on the FCA’s register, and whetehr their services include “advising on pension transfers and pension opt-outs”.
The city watchdog also reiterated its stance, that those providing advice on pension transfers “ought to start from a position that a transfer is unlikely to be in most people’s best interest”.
“The FCA regulates pension transfer advice and has taken significant action where it considers that firms have not met the standards of advice and behaviour expected for financial advice,” the regulator said in a warning to companies.
Pensions Expert reported that John Oldland, chair of trustees of the Merchant Navy Ratings Pension Fund, has left open the possibility that P&O Ferries may not meet its pensions obligations after a controversial dismissal process.
P&O Ferries has pension assets in the MNRPF, a so-called ‘last-man standing’ pension fund. It also participates in the Merchant Navy Officers Pension Fund.
In these schemes, should an employer exit the scheme or become insolvent, their pension liabilities become known as ‘orphan liabilities’. The scheme’s remaining employers become responsible for these liabilities.
“P&O have not said that they will not meet their obligations, but I think that there’s a much wider concern for me as the chair of trustees,” Oldland told the BBC.
In March, P&O ordered ships back to port so it could dismiss nearly 800 of its UK crew without notice in order to replace them with cheaper agency staff.
These new agency staff will be paid an average of £5.50 an hour. While this is below the UK’s national minimum wage, the crew work offshore, meaning it is not illegal. P&O did suggest it might pay the national minimum wage, but only if other ferry operators do the same.
The company has since rejected UK transport secretary Grant Shapps’ demand that it reinstate the 800 sacked sailors, warning the move would topple the company.
Peter Hebblethwaite, P&O’s chief executive, said on March 29: “Complying with your request would deliberately cause the company’s collapse, resulting in the irretrievable loss of 2,200 jobs.”
P&O’s subsequent suspension of sailings has caused serious disruption around Dover, prompting some trade associations and haulage groups to say the traffic chaos is causing “reputational damage” to the UK.
This article originally appeared on FTAdviser.com
