On 30 March 2023, the FCA updated its webpage on Policy Statement 22/13: Calculating redress for non-compliant pension transfer advice.

The webpage has been updated to include a section on defined benefit (DB) pension transfer redress calculations.

The section clarifies the rules and guidance in DISP Appendix 4 that firms must use from 1 April 2023 when calculating redress for non-compliant pension transfer advice.

When firms have calculated the difference between the value of the defined benefit and defined contribution pensions (the primary compensation sum), they need to determine any consequential losses (the secondary compensation sum). The secondary compensation sum should be offset against any gains the consumer has made following the calculation of the primary compensation sum. This avoids consumers being given more redress than they need to put them back in the position they would have been in had they not transferred out.

Furthermore, the valuation date for valuing pension benefits is the first day of the quarter, not the first working day or first business day.