Aegon

tobyboy

I have just received notice that the annuity I purchased with Scottish Equitable plc (now Aegon) is going to be sold onto a company called Rothesay Life plc. I have looked at Rothesay's web site and accounts and I am not relaxed about what I see. They are certainly someone I would not buy an annuity from if I was currently in the market place. As I have no say about this sale, I enquire if it is possible to buy specialist insurance against Rothesay Life failing to meet their obligations through insolvency or any other cause.

xylophone

http://www.rothesaylife.com/media-centre/news/2016/rothesay-life-to-purchase-6bn-of-annuity-portfolio-from-aegon-uk

Rothesay Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

https://www.aegon.co.uk/personal/annuity-transfer/rothesay-life.html

http://www.telegraph.co.uk/finance/personalfinance/pensions/10734608/How-safe-is-my-annuity-if-the-insurer-goes-bust.html

dunstonh

. As I have no say about this sale, I enquire if it is possible to buy specialist insurance against Rothesay Life failing to meet their obligations through insolvency or any other cause.

You dont need to buy anything. Annuities get 100% FSCS protection because of the extremely low risk of failure.

I have looked at Rothesay's web site and accounts and I am not relaxed about what I see.

What is it that you do not like that the PRA and FCA do not have a problem with?

ischofie1

I've received the same letter & not read it in detail but intend to do so.
I'm also interested in comments to this thread.

Malthusian

tobyboy wrote: »

As I have no say about this sale, I enquire if it is possible to buy specialist insurance against Rothesay Life failing to meet their obligations through insolvency or any other cause.

As DunstonH says, it has already been purchased on your behalf.

Malthusian

Consider that the FSCS insures annuities 100%. By comparison, people with DB pensions not yet in payment are only protected up to 90% (and capped) - this is because the Government does not want pension trustees and members to be completely blase about the risk of a scheme going bust (i.e. moral hazard). (Both the PPF and the FSCS are paid for by levies, but in practice the taxpayer is insurer of last resort.)

As annuities are protected 100%, the Government therefore has a tremendous incentive to ensure that you can't simply get some private equity together, get an insurer to offload its annuity book to you at a knock-down price, spend the annuity capital on directors' salaries and fact-finding missions to Bermuda, then go bust and dump the liability on the FSCS. The ceding insurer doesn't care, the annuity policyholders have no reason to care, so all motivation to make sure the acquiring firm isn't going to do a runner rests with the Government. Hence why the transfer will be scrutinised by the High Court in accordance with Part 7 of the Financial Services and Markets Act 2000.

It is therefore very unlikely that even the minor inconvenience of having to apply for FSCS compensation will ever happen.

tobyboy

Many thanks for the reply. Answers my question.

CHALKIE

Hi just a quickie I only got my letter from Aegon today 3rd April and to be quite honest I too am not HAPPY either, what happens if we get a Daily mirror episode like from years ago or just very recently BHS pensions fiasco or if I remember right again years ago a Welsh Metal company closed all the employees lost their pension's. So my question is this transfer to Rothesay Life any safer than the above examples of Pension fund abuse ?. I personally would feel and sleep much easier if we were being transferred to Legal and General instead they have got a long long history and are I believe not connected to Blackrock like Rothesay Life and are not newbies. Chalkie.

Malthusian

CHALKIE wrote: »

Hi just a quickie I only got my letter from Aegon today 3rd April and to be quite honest I too am not HAPPY either, what happens if we get a Daily mirror episode like from years ago

Then you would receive 100% compensation from the Financial Services Compensation Scheme.

or just very recently BHS pensions fiasco

BHS pensioners haven't lost a penny.

or if I remember right again years ago a Welsh Metal company closed all the employees lost their pension's.

Allied Steel? Their collapse led to the formation of the Pension Protection Fund which protects defined benefit pensions. If Allied Steel collapsed today and you had a pension currently in payment with them, you would receive 100% of your pension from the Pension Protection Fund. As it happens you are 100% protected by the FSCS rather than the PPF.

Allied Steel employees did not lose their pensions. They were retrospectively granted equivalent protection to the PPF.

So my question is this transfer to Rothesay Life any safer than the above examples of Pension fund abuse ?

You are just as safe or more safe as you would be in the above examples.

I personally would feel and sleep much easier if we were being transferred to Legal and General instead they have got a long long history and are I believe not connected to Blackrock like Rothesay Life and are not newbies. Chalkie.

Leaving aside that the ownership of Rothesay is irrelevant to you as your annuity is 100% protected by the FSCS, I can't see any relationship between BlackRock and Rothesay. Are you confusing BlackRock with the Blackstone Group?

dunstonh

and to be quite honest I too am not HAPPY either, what happens if we get a Daily mirror episode like from years ago or just very recently BHS pensions fiasco

Well, its a good job neither of those things can happen to your pension isn't it.

r if I remember right again years ago a Welsh Metal company closed all the employees lost their pension's.

Again, that scenario cannot happen to you either. Also, in that case, they did not lose their pensions, they received protection.

So my question is this transfer to Rothesay Life any safer than the above examples of Pension fund abuse ?

The examples you have given have absolutely nothing in common with the type of pension you have. What you are saying is a bit like asking if it is safe to drive your car because you have read about a helicopter having a mechanical fault.

I personally would feel and sleep much easier if we were being transferred to Legal and General instead they have got a long long history and are I believe not connected to Blackrock like Rothesay Life and are not newbies. Chalkie.

It would not make the slightest difference who it is with. You get the same FSCS protection.

CHALKIE

Hi thanks for all the advice and comments posted on my thread RE: my 2 Aegon Pension transfers to Rothesay as I was concerned, so its nice to know there is some 100% protection for our pensions these days now as opposed to what happened many years ago, thank you all for your help to put my mind at rest cheers Chalkie.