04 Aug 2016, 11:42 am
The current methodology used by the industry was developed in the 1990s, and was designed to put customers back in the position that they would have been in had they stayed in the DB scheme, the FCA said.
The methodology "may no longer achieve this objective", and may therefore need to be updated, the FCA said.
Any new methodology will only apply to future redress payments, but current complaints investigations should not be concluded until this consultation has been completed, it said.
"However, the firm should also consider what options may be available for dealing with the complaint fairly on an interim basis before the outcome of the consultation is known. For example, if it is able to do so, the firm may offer provisional redress now and then provide a final response and any further redress where appropriate once the outcome of the consultation is known," the FCA said.
The Work and Pensions Committee warned last year that insufficient guidance and advice on pensions is endangering UK savers.
UK pension providers and regulators must do more to encourage savers to access financial guidance or advice at the point of retirement, or risk "another financial mis-selling scandal", the committee warned.