standard life windfalls £250 fixed payment ??

bilbo_2

whats the opinion on this ??

Standard Life set to offer fixed payouts
LIFE insurance giant Standard Life was today reported to be set to offer all eligible policyholders a minimum windfall in a bid to get maximum support for its planned demutualisation.

The group's directors are planning to meet next month to decide what the minimum windfall payment for members will be if it lists on the London Stock Exchange.


They are understood to be considering offering a fixed payout of between £250 and £500 to all of the 2.4 million policyholders who are eligible to vote on the move and who will qualify for a payout if the flotation goes ahead. A further variable windfall will be paid on top of this based on how long people have held their policies and how big they are.

However, today, Standard Life spokesman Scott White said no decision has yet been made. "A fixed element together with a variable amount to reflect the size of the investment in the with-profits fund is one option that could be considered, but nothing will be decided until about six weeks before the proposals are put forward in May or June," he added.

Total windfalls for members are likely to average around £1000, according to a newspaper report.

It is thought likely the minimum payout will be closer to £250, rather than £500, as this would be seen to be fairer by the regulator and the courts.

Edna_Bucket_2

The last bit appears to be garbage - who "says" £250 would be seen to be fairer by the regulator and the courts?
There is no substance or history to that observation at all.

It wouldn't be worth long-suffering StL members voting for a non-variable figure under £500, and the company should be left in no doubt about that.

bilbo_2

Edna_Bucket wrote:

The last bit appears to be garbage - who "says" £250 would be seen to be fairer by the regulator and the courts?
There is no substance or history to that observation at all.

It wouldn't be worth long-suffering StL members voting for a non-variable figure under £500, and the company should be left in no doubt about that.

i'm sure all the £20 stakeholder pension holders would agree with you but not sure if the 20 year with profits policy holders would !!

dunstonh

I personally think that they will go for the lower amount but reward long term, larger values greater. At least I would like to think they would

carnet

dunstonh wrote:

I personally think that they will go for the lower amount but reward long term, larger values greater. At least I would like to think they would

As a 20+ year policyholder, totally agree.

The smaller the fixed payment for loss of voting rights to the many £20 SHP baggers and the like of the last 5 years or so, the more the variable amount available to the long standing, large value policyholders who have seen the values of their policies continually reduced in recent times.

Anyway, a £250 return on a £20 "investment" is no matter for complaint .

carnet

Edna_Bucket wrote:

It wouldn't be worth long-suffering StL members voting for a non-variable figure under £500, and the company should be left in no doubt about that.

See my above post.

"Long-suffering StL members" should be hoping for the smallest possible fixed payment necessary to get the DM vote through.

bilbo_2

i agree £250 for a £20 flutter is ok for the SHP

Anything more would be greedy

People's_Will

There are very few £20 SHP holders among Standard Life's 2.4m members and they will not feature in the board's decision on the level of the fixed rate windfall.

As the stock market shows signs of a significant recovery it seems odd that Standard is courting controversy. It is established past industry practice to fix £500 as the basic minimum for loss of membership & voting rights.

The only reason not to do this would be if the stock market valuation of the company was too low.

I expect the final flotation figure to be very significantly more than the £4 billion still quoted by some newspapers. I think the average windfall (fixed and variable payments combined) will be much higher than the £1,000 mentioned yesterday. £1,000 average would imply a £4.4 billion valuation, assuming the company raises £2billion capital at flotation.

Of course, Standard Life itself will not want to raise expectations in advance of the float, for fear of disappointing members yet again.

carnet

People's_Will wrote:

There are very few £20 SHP holders among Standard Life's 2.4m members and they will not feature in the board's decision on the level of the fixed rate windfall.

IIRC there are about 400,000 "recent" members, the vast majority undoubtedy holding £20 SHP "bagger's specials" - and, unfortunately, SLAC needs their votes, as they will mainly all vote - unlike over half the long standing members .

It is established past industry practice to fix £500 as the basic minimum for loss of membership & voting rights.

Depends on you definition of "established". Whilst the last four life offices to DM did set their fixed payment at £500, Scottish Amicable was £250 and NPI £300.

I expect the final flotation figure to be very significantly more than the £4 billion still quoted by some newspapers. I think the average windfall (fixed and variable payments combined) will be much higher than the £1,000 mentioned yesterday. £1,000 average would imply a £4.4 billion valuation, assuming the company raises £2billion capital at flotation.

Whilst the term "average" payment is virtually meaningless to most policyholders, agree the overall value is being deliberately played down - at least I very much hope so .

bilbo_2

carnet wrote:

Whilst the term "average" payment is virtually meaningless to most policyholders, agree the overall value is being deliberately played down - at least I very much hope so .

hope you are right on that one or we will be looking what might have been in 2000

carnet

bilbo wrote:

hope you are right on that one or we will be looking what might have been in 2000

Although StdL's valuation was put at up to £12 billion in 2000, at the rate of demutualising pace they've demonstrated, had Fred Woollard's attempt been successful, it would have been at least 2002 or even 2003, ie. at the nadir of the bear market, before they actually floated, so their value would have been considerably less.

However, even so, it would still more than likely have been much higher than it will be next summer.

The value of long term member's policies, vis a vis the amount invested, would also have been much higher then than now, allowing them to take their windfalls and scarper .

All those members who actually believed SLAC's "hoodwinking" and voted against DM at the time have only themselves to blame :rolleyes:.