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Redress Calculations

Redress Calculations

In dealing with complaints advisor firms will need to calculate redress if a complaint is upheld.  Redress calculations for defined benefits schemes are complex as one is required to determine the difference between the value of defined benefits given up and the current flexible arrangement e.g. SIPP.  In most cases, the calculation requires the use of the following assumptions: 

  • Interest rates 
  • Inflation  
  • Mortality 

We are able to model scheme benefits taking into account the above factors and provide a detailed actuarial report for the value of pension benefits that a former member would have received if he or she had not transferred to a flexible arrangement.  That may include the modelling of the flexible arrangement which is not easily determined. 

An actuarial report may be required in settlement negotiations with the complainant (or their representative) or as a result of an Ombudsman direction or award.  In some cases, it may be a requirement of the respondent firm’s Professional Indemnity insurance to have a detailed actuarial report.

Our redress calculation for defined benefit transfers follows the FCA methodology and has been extensively tested by our clients.  It caters for the many features of a typical pension scheme including the British Steel Pension Scheme.

DB pension transfer complaint - Congruent

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