'Proposed transfer of policy' from Co-operative Insurance

Aaaaant

Hello

I've received a letter from my current stakeholder pension provider - Co-operative Insurance. It is here: https://www.royallondongroup.co.uk/Documents/Coop/pdf/part-vii/RLCIS%20Policyholder%20Letter.pdf – the policyholder booklet is here: https://www.royallondongroup.co.uk/Documents/Coop/pdf/part-vii/RLCIS%20Policyholder%20Booklet.pdf

It basically says it is transferring my pension to Royal London. I'm looking at my options and wondering what my rights are, can anyone answer any of my questions?

• Do I have to accept this transfer or can I switch to another provider?
• With the original pension company I signed up to ceasing trading in this area, can I cash in the pension?
• Do I have any other rights/questions I should be asking?

Many thanks!

Your_Hero

The deal has already been done many moons ago. This is just the final step to seal the deal so that all the assets fall under the Royal London brand.

The letter clearly says it is unlikely to make any noticeable difference. It is, however, a good time to review the plan and make sure it's on track to give you a good retirement.

jamesd

Your current stakeholder pension provider is not Co-operative Insurance. It is Royal London. RL bought this part of the CIS business in 2013 and you are now a customer of RL.

RL is proposing to move your money from the former CIS part of the business, an independent sub-company, and instead make it a part of another CIS fund, in the main CIS company.

You would lose the protection of the General Fund part of the CIS subsidiary company. The letter does not say what will happen to the money in the General Fund, other than that it will not be transferred. I suggest that you fin doubt. RL may get it as shareholder profits and that would perhaps be a reason to not support the move.

Linton

jamesd wrote: »

.....

You would lose the protection of the General Fund part of the CIS subsidiary company. The letter does not say what will happen to the money in the General Fund, other than that it will not be transferred. I suggest that you fin doubt. RL may get it as shareholder profits and that would perhaps be a reason to not support the move.

Is this relevant if the stakeholder pension purely contains non-WP unit linked funds with no guarantees? What protection would the General Reserve offer?

kidmugsy

jamesd wrote: »

. RL may get it as shareholder profits and that would perhaps be a reason to not support the move.

Isn't RL a mutual, jamesd? If so, there are no shareholders.

jamesd

Linton wrote: »

Is this relevant if the stakeholder pension purely contains non-WP unit linked funds with no guarantees? What protection would the General Reserve offer?

Irrelevant if there are no with profits funds in it. Some with profits funds are involved in the transfer but we don't know whether Aaaaant has any of them. The General Reserve could be used to support the funds if there are drops in the value of investments or difficulties in paying for the commitments made for any other reason.

RL asserts that in general there is no right to use the General Reserve money for supporting the funds. The court is to rule on this. After it's too late for the policy holders to object. The General Reserve is currently used to support the funds.

As the amount of money in the with profits business decreases the General Reserve might currently end up having to be distributed to the policy holders. This will not be possible after the change.

Another proposed change says that the policy holders will have no rights to the working capital used for the funds.

Overall it's my impression that the money that could go to the with profits fund owners is going to be used to pay for the purchase by RL instead of going to them and similarly for the working capital.

kidmugsy wrote: »

Isn't RL a mutual, jamesd? If so, there are no shareholders.

Wrong shareholders, it turns out. The General Fund is £200 million. £180 million of that will be paid to the Co-operative Bank Group and hence to its shareholders as part of the purchase price for RL buying it from CBG. So the reserve to which the policy holders may have rights is being used to buy the company.

For those reasons I believe that the holders of with profits policies should object to the transfer and ask the court to rule on their ownership of rights to these bits of money and reject the transfer if the court concludes that they do have those rights.