aviva - reattribution offer

dunstonh

When I took out my policy I was lead to believe that the target return was virtually certain.

Up until the turn of the millennium endowments had never fallen short. So, there is a long history of them hitting target and paying surpluses. If nothing has ever gone wrong with a risk then the risk becomes diluted over time and generally thought of as not much of a risk. Complacency sets it.

You would have then thought that in bad times the surplus from good times would be used to smooth it out.

It does. However, there is only so much you can smooth events when two major events occur in quick succession along with taxation changes and FSA increasing the solvency requirements focusing funds to prioritise safety before returns.

Its the old story that the main benefits of the finance industry go to the people that work in it. For that principle I'm voting no.

Its nice to see you are willing to give up the money for your principles.

I am sure that any recent policy's sold are on a much more pessimistic base and therefore are on target. Has anyone out there got a policy run by Aviva over 10 years old and on target?

You are only talking about endowments. They make up a small element of the fund. The with profits funds are used in other tax wrappers as well, such as pensions and investment bonds. I have some of those still on my books and they have actually been doing quite well and achieving their objectives. Whilst with profits is largely obsolete, the CGNU fund (as it was) has actually been quite a good performer in the last 7 or 8 years. Even with the recent drops.

Maized_in_Cornwall

Policyholder Advocate recommends 2016 maturing policyholders to take the money - so little choice there and as has been stated by many here we're likely to be "pushing daisies" anyway by the time it comes round again

so in the meantime...

how much is going to be left in the pot? After the likes of me take their 'offer' and then the shareholders get their whack what's goner be there for the NO voters in the future...

Poor_Ben

My Policy doesn't mature until 2021. Would it be advisable to vote "No" on the re-attribution offer
and also, would I automatically receive this `Bonus' when my policy does mature?

Thanks

Poor_Ben

Poor_Ben

Is anybody able to answer my previous question please.

maryotuam

Don't know Ben. In your shoes I would probably take the money as they always find new ways of ripping off the ordinary policy holder. Heads they win, Tails you lose

daveyjp

Poor Ben - If you vote "no" you are gambling that before 2021 there will be another reattribution vote.

No one knows if there will be, but reattribution is rare and it's one reason why this has taken so long to sort out.

If you vote "no" and there isn't another chance you won't get the money, ever.

engconsultant1

Dear Bloggers,

I am genuinely amazed at the level of misconception of this matter. In short Inherited Estate is the surplus monies built up by Norwich Union form investments made from your contributions and yet not paid to you in bonuses.

Sure the company gives you an annual bonus on the product, but how many of you have been told they are under performing and require further investment from you to prop them up.

Then to add insult to injury the company, in a bid to return share value to its share holders and to underwrite new business, want to strip you of any rights you have to future payouts from this "Inherited Estate" in favour of some minor financial incentive.

Ask yourselves some very simply and obvious questions.
How much have you received in special bonuses over the last year or so, in my case they amass to three times the annual bonus paid on the policy.

Question 2: Doesn't anybody else think it questionable that we've been dripped fed information. I registered for updates from the Policy Holders Advocates team, via email. Now were rapidly approaching a decision deadline (two weeks) this team start to publish copious amounts of paperwork on the website. They've had the process in hand for 3 years now and yet are only publishing data now??

Question 3: this thread has mentioned mortgage promises, yet try speaking to the policy holder advocate or even NU about it. Better still ask the question what happens if I accept the offer. In short by accepting this offer your benefits under your existing plan will terminate. You will be placed on a new with profits plan under Aviva as new business. (How well do you think that'll perform, and as your mortgage promise STIPULATES that NU will meet a guaranteed amount (shown in the offer) to support any shortfall, but also stipulates only in the event on no material changes to the plan. Hello, people. By accepting the offer your current plan will end, no doubt NU's liability under the mortgage promise will also disappear in smoke.

Just to clarify, my offer for re-attribution was £550. My mortgage promise is worth £9,800. I would think the decision was obvious. Quick buck or healthy chunk of change when it'll be needed.

Finally, just think about what NU are doing, morally. They taking surplus interest earned off the back of our investments, and NOT paid to us, to offer share value to their share holders.

PLEASE!

Lets send the b*ggers a message. Vote No. At worst they'll have to re-evaluate their offer if they want access to £6Billion of so they've accumulated.

dunstonh

In short by accepting this offer your benefits under your existing plan will terminate.

No they dont.

By accepting the offer your current plan will end, no doubt NU's liability under the mortgage promise will also disappear in smoke.

It doesnt.

Please do not spread misinformation.

MiloH

engconsultant1 wrote: »

Dear Bloggers,

I am genuinely amazed at the level of misconception of this matter. In short Inherited Estate is the surplus monies built up by Norwich Union form investments made from your contributions and yet not paid to you in bonuses.

That's not actually true. The inherited estate is made up of money not paid as bonuses to previous generations of policyholders. At the moment current policyholders don't know whether they are going to get back their fair share of the fund, a bit more or a bit less. That will only be certain when they get their money back.

engconsultant1 wrote: »

Sure the company gives you an annual bonus on the product, but how many of you have been told they are under performing and require further investment from you to prop them up.

I think that's a really good point. It's one of those dark and misunderstood secrets of with-profits funds that some policyholders are paying more in charges now than when they took the policy out. Aviva are indeed one of the insurance companies who decided this would be a good way of getting policyholders to meet the guarantees shareholders had made them. They have been charging an extra 0.75% per year to these policyholders for the last five years, just so the fund could take a higher exposure to the stock market. If they hadn't done this they would have been invested more heavily in gilts over the past five years; a boom time for gilts while stock markets have fallen.

However, as part of the terms of the reattribution offer Aviva have been forced to guarantee that they won't slap an extra charge on to policyholders in this fund. Quite right too.

engconsultant1 wrote: »

Then to add insult to injury the company, in a bid to return share value to its share holders and to underwrite new business, want to strip you of any rights you have to future payouts from this "Inherited Estate" in favour of some minor financial incentive.

Only policyholders who are policyholders at the time of any future special distribution are entitled to a payout. If your policy is going to mature within the next few years, or if you're thinking you've had enough of with-profits and may cash-in or transfer, you're unlikely to be a policyholder at that time. For those people it's money for nothing.

engconsultant1 wrote: »

Ask yourselves some very simply and obvious questions.
How much have you received in special bonuses over the last year or so, in my case they amass to three times the annual bonus paid on the policy.

The three years of 3.6% special distributions were, in my opinion, an act to help ratify the reattribution offer and fund transfer. They agreed to distribute the surplus when markets were high. The fact investments have fallen so much in the past 18 months and the fact that surplus has already been stripped, perhaps a more pertinent question to ask is how long will it be before there is a surplus able to be passed on? Quite some time in my opinion.

engconsultant1 wrote: »

Question 3: this thread has mentioned mortgage promises, yet try speaking to the policy holder advocate or even NU about it. Better still ask the question what happens if I accept the offer. In short by accepting this offer your benefits under your existing plan will terminate. You will be placed on a new with profits plan under Aviva as new business. (How well do you think that'll perform, and as your mortgage promise STIPULATES that NU will meet a guaranteed amount (shown in the offer) to support any shortfall, but also stipulates only in the event on no material changes to the plan. Hello, people. By accepting the offer your current plan will end, no doubt NU's liability under the mortgage promise will also disappear in smoke.

Just to clarify, my offer for re-attribution was £550. My mortgage promise is worth £9,800. I would think the decision was obvious. Quick buck or healthy chunk of change when it'll be needed.

Firstly, NU never guaranteed the mortgage promise. They just made a promise. Now, to you and me it's hard to tell the difference, but that's where you and I differ to with-profits actuaries. Apparantly if you're an actuary you can break a promise but not a guarantee.

Secondly, you'll be delighted to learn that another one of those concessions that Aviva have been forced in to is to remove the squirming room they gave themselves on the mortgage promise. They could break the promise if they felt they couldn't afford it whereas these Affordability Conditions have been removed under the terms of the reattribution offer and fund transfer. So your mortgage promise will be honoured in the new terms whether you accept the offer or not.

Not so lucky are other Aviva with-profits policyholders for whom the affordability conditions remain.

See bottom of page 11 and top of page 12 for details at this link:
http://http://www.aviva.co.uk/adviser/product-literature/files/gn/gn16174c.pdf

engconsultant1 wrote: »

Finally, just think about what NU are doing, morally. They taking surplus interest earned off the back of our investments, and NOT paid to us, to offer share value to their share holders.

I agree that there are moral issues here and Aviva's actions are driven by seeking to maximise returns to shareholders. But at the moment you cannot say that it is your money; it's the money from other poor saps who have already left the fund with less money than they ought to have had.

engconsultant1 wrote: »

PLEASE!

Lets send the b*ggers a message. Vote No. At worst they'll have to re-evaluate their offer if they want access to £6Billion of so they've accumulated.

According to the with-profits actuary I spoke to a few weeks back, they already have enough yes voters to proceed with the deal. And if the deal doesnt go through the courts then the terms of the "Alternative Scheme" apply, under which your mortgage promise would revert to the affordability conditions applying.

Eligible policyholders need to make a calm and rational decision here. In my opinion, this is not a time for making moral judgements. For many who vote no or who fail to vote at all, they will simply be giving money to future generations of policyholders to enjoy.

peterbaker

dunstonh wrote: »

Quote:
In short by accepting this offer your benefits under your existing plan will terminate.
No they dont.


Quote:
By accepting the offer your current plan will end, no doubt NU's liability under the mortgage promise will also disappear in smoke.
It doesnt.

Please do not spread misinformation. .

Dunstonh I am amazed but not surprised at your constant attempts to shore up what your industry does. Afterall, you have long derived an income from the industry and you naturally don't want to be seen to undermine it, or the work you have done in the past when you have put your own faith into the industry playing fair.

But can we get real? Engconsultant1 is not exaggerating or spreading disinformation. His take on the situation is equally as valid as yours. How many times did you use the word reattribution in your sales advice on With Profits products before Aviva made their play? And before AXA? Did you ever? I rather think not, because it was dreamt up as a jolly wheeze rather more recently than those that willingly define it for us at every opportunity imagine.

I have a large number of diverse financial services products and NONE of them work how they were sold. So when I get yet another notice cancelling a promise or worse still attempting to bribe me to give up a promise, I log it and pretty much let them do what they think is fair for people who do not agree to their limited choice of options. I'm not making it easy for them by putting my own head in the noose. For as long as the FSA remain silent about the rights and wrongs of it, I'll judge the product at maturity thanks very much and meantime just be amused watching the mice that call themselves professional at play as they try to steal the cheese even before I've put some in the trap. On the odd occasion when everyone seems agreed that maturity looks like going completely pear-shaped I have had to jump in early with all guns blazing, but this isn't one of those occasions, is it? It's just Aviva chancing their arm and blowing hot and cold to confuse customers. The FSA should fine them for behaving like spivs.

Today I received yet another obnoxious letter from AVIVA headed "Time's running out -make your choice now!"

Clearly it was drafted and approved by spivs. Who but a spiv would draft a letter of such seriousness with a heading ending in an exclamation mark?

Aviva will get their come-uppance from me when I expect original promises to be kept and if they dare to have broken them. Until then, they can chop down trees and print heaps of crap studded with exclamation marks for as long as they like. I shan't be paying for it. They will - heavily if they make a fuss when I am ready to collect.