SIB urges retirees' priority in transfers of pensions

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INVESTORS who have retired or who are approaching retirement should be the priority for life insurers tackling the problems caused by personal pension transfers, the Securities and Investments Board said yesterday, writes Paul Durman.

The SIB issued guidance to junior regulators, setting out how it wants their member firms to address the transfer problem. Many thousands of investors are thought to have been badly advised to switch their retirement benefits from an occupational pension scheme into a personal pension plan. The compensation bill is expected to run into hundreds of millions of pounds.

The SIB urged life insurers and other financial firms to gather information on high-priority cases.

It also wants financial firms to resolve the position of disadvantaged investors now, rather than waiting for SIB's July statement.

The SIB has also issued guidance aimed at preventing a repetition of past abuses. It will require an explicit 'reason why' letter to investors, which should make clear why a personal pension transfer is suitable, and address the consequences of leaving the occupational scheme.