Rolls-Royce warns regulators about spike in transfer numbers

In a joint statement, published on Wednesday, the FCA, the Pensions Regulator and the Money and Pensions Service stated they had been in talks with Rolls-Royce and its scheme trustees due to a surge in the number of DB transfer requests as a consequence of redundancies.

In May, the engine maker announced it would cut 9,000 jobs, and in June revealed that more than 3,000 workers had applied for voluntary redundancy.

As a result, the FCA has issued a data request to a number of advisers with clients looking to transfer out of the scheme and said it would take action where it finds evidence of poor advice.

According to a Rolls-Royce spokesperson, the company “strongly supports” the FCA’s actions and urges the regulators to take action wherever an adviser is found to have been providing unsuitable advice.

It stated: “Our DB pension scheme is — and remains — well funded. The unprecedented impact of the Covid-19 pandemic on the whole aerospace industry, however, has forced us to restructure our business and this is resulting in a significant number of job losses in the UK.

“We proactively alerted the FCA that this restructuring was attracting attention from various financial advisers targeting our colleagues, and we have been keeping the FCA and TPR regularly updated on the number of transfer requests that have been received by the trustees.”

Rolls-Royce provides all of its retiring employees with access to free financial advice delivered by a regulated adviser selected in partnership with the scheme trustee.

Last week, Rolls-Royce said it was dealing with a “very high number of transfer payment requests”, claiming many were arriving with missing information or poorly scanned and unreadable documents, which it warned was causing delays.

The Rolls-Royce DB scheme was closed to new members in 2007 and has 7,500 active members, 20,000 deferred members and 13,000 pensioners.

The FCA added: “All advisers should be clear on the FCA’s expectations when offering advice to members of the scheme. Where the FCA sees unsuitable advice or bad practice it will take action.

“TPR is working closely with the trustee in its role to protect savers.”

It reiterated its stance that transferring out of a DB scheme was “unlikely to be in the best interests of most consumers”, and that any members looking for guidance or thinking of transferring out should contact The Pensions Advisory Service, which is part of Maps.

This article originally appeared on ftadviser.com