Equitable Life payment and my pension

barryd999

Im sure this has been covered and I appoligise in advance for my lack of knowledge or asking questions that may have been answered before.

In the 90's I had a company pension with Equitable life but since Ive been self employed since 2001 its just sat there. When I last checked a few years ago there was according to Equitable life about £29000 in it. They regularly send me statements which I never understand really.

I know there is a compensation scheme although I dont fully understand what went on / is going on and I have just received a cheque for £2300 from them. I assume this is part of the compensation. Can I also assume that my £29000 is still there?

I guess I need to contact them but thought I might get a clear explenation on here.

Thanks

woolly_wombat

Glad to hear that you have received your cheque.

The link to the Equitable Life Payment Scheme website is here:
http://equitablelifepaymentscheme.independent.gov.uk/

The link to HM Treasury's 53 page document entitled 'The Equitable Life Payment Scheme design' is here:
http://equitablelifepaymentscheme.independent.gov.uk/docs/pdfs/elps_main_doc_final.pdf

The good news is that you have received a payment.

The bad news is that it amounts to only 22.4% of your 'relative loss' (the additional amount that you would have expected to have received if you had invested in a similar product in a comparable company's With-Profits fund)!

woolly_wombat

I should also have mentioned that your pension fund will still be intact.

It's worth having a look at the original policy document to see if it included a Guaranteed Investment Return (GIR), typically 3.5%, which could turn out to be quite valuable in the current low interest rate environment.

Thrugelmir

woolly_wombat wrote: »

I should also have mentioned that your pension fund will still be intact.

It's worth having a look at the original policy document to see if it included a Guaranteed Investment Return (GIR), typically 3.5%, which could turn out to be quite valuable in the current low interest rate environment.

Also a 12% uplift in policy value the other year.

My cheque for just under £4,500 went straight into my SIPP. Very welcome!

atush

Now you have recived your payment, you could consider moving your fund.

But before you do- please MAKE SURE you do not have a very valuable guarantee attached to your pension such as, perhaps, a guaranteed annuity rate twice the rate available now. It is these guarantees that basically bankrupted EL so you just might have one if your policy is old enough.

woolly_wombat

please MAKE SURE you do not have a very valuable guarantee attached to your pension such as, perhaps, a guaranteed annuity rate twice the rate available now. It is these guarantees that basically bankrupted EL so you just might have one if your policy is old enough

The GARs were all lost when guaranteed policyholders signed away their guaranteed pension rights in 2002 under the so-called 'compromise' deal (known as the CONpromise deal by many in the Equitable Life community).

Just GIRs left now. It's my understanding that policyholders aren't really aware of the true value of their policies until they reach maturity (typically at age 60) when then GIR is applied.

Now you have recived your payment, you could consider moving your fund.

You don't currently have to be a policyholder to receive a payment, you just have to have started or paid into a with-profits policy during the eligibility period determined by the Equitable Life Payment Scheme.

You could consider moving your fund during this period of volatility in the markets, or you might think it's worth sticking with Equitable if you have a GIR.

Thrugelmir

atush wrote: »

Now you have received your payment, you could consider moving your fund.

I moved the unit linked some years ago. Left the with profit part. Now treat this as my fixed interest fund with its 3.5% guarantee.

As the remaining fund is being run very conservatively. I expect there to be further uplifts in policy values as well.

The 12.5% boost from April 2011 may not be the last.

beansy

woolly_wombat wrote: »

Glad to hear that you have received your cheque.

The link to the Equitable Life Payment Scheme website is here:
http://equitablelifepaymentscheme.independent.gov.uk/

The link to HM Treasury's 53 page document entitled 'The Equitable Life Payment Scheme design' is here:
http://equitablelifepaymentscheme.independent.gov.uk/docs/pdfs/elps_main_doc_final.pdf

The good news is that you have received a payment.

The bad news is that it amounts to only 22.4% of your 'relative loss' (the additional amount that you would have expected to have received if you had invested in a similar product in a comparable company's With-Profits fund)!

My husband and I are in a superan scheme but as we didn't join at the beginning of our employment due to finances, as our salary increased and circumstances changed we paid into an AVC with Equitable Life which is paid direct from our wages each month and if we leave or take our employer pension we can no longer continue contributing to this.

Therefore, am I right in thinking we will not be eligible for this payment please?

woolly_wombat

Therefore, am I right in thinking we will not be eligible for this payment please?

All the policies eligible for payment were so-called "with profits" policies. Have a look at the eligibility criteria and table here to see if you think you could be eligible:
http://equitablelifepaymentscheme.independent.gov.uk/faq/question5.htm

Old_Slaphead

Thrugelmir wrote: »

As the remaining fund is being run very conservatively. I expect there to be further uplifts in policy values as well.

The 12.5% boost from April 2011 may not be the last.

You sound confident.

It's also possible that "The 12.5% boost from April 2011 may not last". Who knows - it's certainly not a commitment that's been set in stone by EL.

Incidentally AIUI the 12.5% is being applied to the surrender value and not the policy value - unless the move out is for the purpose of taking benefits. This can mean in some cases the transfer value may be less than policy value even with the 12.5% added.

Thrugelmir

Old_Slaphead wrote: »

You sound confident.

More confident than I feel with other investments currently. Given that the EL fund has to be conservatively managed.