Pension review deadline looms

The Law Society is urging firms which were involved in pensions transfers and opt-outs to ensure they meet the interim end of year deadline to review such cases.

The firms are required by the SIB to investigate such cases following the pensions debacle where large numbers of clients were wrongly advised to transfer or opt out of pensions.

However, there are a number of concerns about the investigations. Many firms which have given up financial services are having to consider employing consultants to review such cases. There is also concern that firms may wait until the last moment to investigate.

It is thought around 60 firms will have to conduct the investigations. Bob Copeland, head of the Law Society pensions team said: "The difficulty is that the review goes back to 1988. Some firms may no longer have financial advisers.

"There are a lot of firms which used to do discrete investment business and no longer do it either because it was not financially viable or the recession meant there was a lack of business."

He said the main problem was with those advised on opt-outs. "The problem with opt-outs is that in nearly all cases, the advice given will be wrong as most employee schemes offer better benefits that personal pensions," Copeland said. "If firms have done these, then this will lead to claims."

The Law Society has set up a monitoring unit to help firms meet the requirements of the review and issued a statement in June on how firms should carry out the monitoring.

"Various dates are laid down by the SIB. These depend on the type of case and the circumstances of the case and the age of the client," said Copeland, adding that the firms had to contact the client and say whether the advice given was correct and the appropriate means of redress.

The SIF will have to pay out if there are claims. For opt-outs, the SIF may have to fund the cost of getting back into the scheme or top up the personal pension to the value of the loss.

But, SIF managing director John Speedman said he did not expect many claims on the fund. "So far, two firms have notified us of possible circumstances for a claim," he said, adding that at this point solicitors would have to follow the review procedures and comply with Law Society guidelines.