SIB chairman Andrew Large said: 'Investors who were missold personal pensions and suffered loss are entitled to redress and we are determined that they will get it. Progress in the pensions review over the last two years has been unacceptably slow with firms using unduly elaborate enquiry forms. This has led to blockages as schemes have not been able to respond to them. Case reviews have had to be put on hold.
'The central objective of today's new guidance, which sets out a straightforward way to proceed, is to help all sectors of the industry to complete reviews as quickly as possible, while ensuring a fair deal for investors. Our goal is that the pace of the review should be appreciably quickened whilst still providing the delivery of redress where redress is due.
'All those firms with a sense of responsibility will now be able to carry out most of their case reviews without further delays. Those who persist in dragging their feet, should expect this to be taken as a prompt for regulatory action leading to appropriate discipline.'
The solution, detailed in the SIB's guidance, is a much simplified approach to obtaining information. This works by reducing the number of specific questions an occupational scheme must answer from over 200 to under 8, and by supplementing this with other easily provided information such as the scheme booklet. The new approach has been empirically tested by Price Waterhouse and shown to deliver broadly the same results as the original October 1994 guidance, with no systematic bias in favour of either investor or investment firm. In the SIB's judgement this change from theoretically precise accuracy should enable a significant acceleration of the review to take place to the benefit of investors.
The SIB guidance itself contains the essential data for the eight largest public sector schemes. and from today it will therefore be unnecessary for such schemes to be contacted directly by pensions' firms for scheme information.
Today's statement of policy confirms that two key aspects of the 1994 guidance remain unchanged. Firstly, reinstatement into occupational schemes for past service is a remedy preferable to topping up a personal pension. Secondly, firms will continue to be required to review cases of people who were sold personal pensions after they became eligible to join an occupational pension scheme, without actually having joined.
Today's guidance from the SIB is addressed to the front-line regulators in the expectation that they will take steps to implement it in relation to the firms they regulate. The PIA, which is responsible for the majority of such firms, is today issuing a consultation document on the new guidance. PIA and the other regulators will be publishing quarterly figures showing pensions review progress.
Once firms have had time to assimilate the guidance, front-line regulators will be determining with their firms realistic new target dates which will then be monitored. Firms failing to carry out their responsibilities must expect disciplinary action from their regulators. The SIB, for its part, will expect the front-line regulators to resource themselves adequately to carry out the enhanced monitoring required.
One aspect of the new simplified procedure is the role that investors themselves can play in providing some of the basic information required. The SIB and the PIA will be working urgently on measures to improve investor awareness of the vital need to respond promptly to inquiries from firms in order to ensure that case reviews are completed without further delay. The SIB is also taking steps to ensure that in the meantime that the Consumers' Association and other agencies are informed about this new development and its implications for investors.