DST Global Solutions launches new solution for Pension Switching Redress Calculations
DST Global Solutions announces today the launch of its online pension switching redress solution, RECAL-PSR. The offering is designed to calculate redress for investors inappropriately advised to ‘pension switch’ from one defined contribution pension to another.
RECAL-PSR was created in response to Financial Services Authority (FSA) concerns regarding incidences of inappropriate pension switching advice; the FSA has called for advising firms to review advice processes and in some cases take remedial action.
RECAL-PSR is designed to provide consistent and auditable redress calculations in consideration of the primary reasons that unsuitable advice is given, as determined by the FSA. Built on a scalable and secure platform, RECAL-PSR offers flexible and intuitive modelling options and includes access to a product and performance data library.
Unlike the Pensions Mis-selling Review and subsequent FSAVC Review, the FSA has not mandated an industry-wide review in this case, nor has it provided detailed guidance for determining redress. This presents an industry need for a software solution to help resolve redress issues in an objective, fair and consistent fashion.
Robert Childs, Head of Operations of the PAS (Pensions and Actuarial Services) business at DST Global Solutions, commented, “In the absence of a regulated basis for performing pension switching redress calculations, we have drawn upon the extensive experience we gained throughout the Pensions Mis-selling Review of the mid 1990s to develop a flexible online calculator that models cases from first principles.”
DST Global Solutions’ PAS business has offered its RECAL family of review software since 1994. Used extensively by product providers, banks, financial advisers and outsourcing firms for the Pensions Mis-selling Review instigated by the FSA, RECAL was the calculation software of choice for many firms and is estimated to have been used on over half of all cases processed during the review.
“We believe that our software will prove invaluable for firms that are undertaking pensions switching reviews, and will help them ensure that calculations are performed consistently within an auditable environment,” Childs said.
Approximately 4,500 firms have either provided or are offering pension switching advice, and around a third of these are transacting large volumes. Furthermore, an estimated 10 percent or more of cases are found in need of review.
