Equitable Life - reduction in payouts?

woolly_wombat

Of course you could just sit tight and do nothing.

You could get an uplift if ELAS abolish the GIR.

Who knows? Not me!

sarahemmm

Have just read this thread with interest, as I have a small (~20k) Equitable Life pension which I paid into in the 90s. I stated that I expected to retire at 60 (last year), and changed that to 62 when they wrote to me. I do intend to retire next year, at 62.

Does that sound as if I have fulfilled the requirements, or am I likely to lose my GV?

woolly_wombat

sarahemmm wrote: »

Have just read this thread with interest, as I have a small (~20k) Equitable Life pension which I paid into in the 90s. I stated that I expected to retire at 60 (last year), and changed that to 62 when they wrote to me. I do intend to retire next year, at 62.

Does that sound as if I have fulfilled the requirements, or am I likely to lose my GV?

More questions than answers I'm afraid:

1. Does your GV exceed the transfer value?
2. If yes, when did the GV overtake the transfer value?
3. Assuming you do not want to take an annuity, have you asked ELAS about immediate drawdown?

My WP pension policies date from the very late 80s and my transfer value is considerably higher than the 'nominal' GV.

I shall reach my maturity date within the next 18 months. Until I get there I don't really trust that 'nominal' GV.

Am I right to be suspicious?

woolly_wombat

Link to an old TMF forum where 'Cereboot' reports having transferred an AVC out of Equitable Life at retirement unreduced:

"there would have a been a discount applied on a transfer if all the money would remain uninvested but since I would be immediately taking benefits in the SIIP the transfer was the "full" value...since Equitable do not offer drawdown".

http://boards.fool.co.uk/tax-free-cash-and-avcs-12888927.aspx?sort=whole

neilvw

I can confirm that the rules with regarding to you being able to take your CSAVC policy with Equitable Life as a cash lump sum not being applied from 1/04/2015 was already in place before this date. Therefore, members with an Equitable Life CSAVC even before 01/04/2015 were not offering members with this option resulting in the options for you have never changed. This rule only changed from members with a Scottish Widows policy as Scottish Widows come to an agreement with [the Government] to get them the full cash lump sum option as of 1/4/2015. You are not restricted as such you just do not have the flexibility's to take you policy as a full cash lump sum as Equitable Life confirmed they were unable to provide this option for tax reasons. Your questions regarding the guaranteed value I have forwarded directly to Equitable Life to be answered.

This refers, I think, only to taking the whole pot as cash.

Probably the easiest way forward is to ask Equitable Life for a retirement quote (i.e. for taking an annuity with them - or rather with Canada Life, to whom they have farmed out their annuities), and a transfer-out quote. Compare the values you get and please let us know.

br1anstorm

I'm still trying to get clear, straight, answers out of either Equitable Life (the provider) or MyCSP (the scheme administrator).

It's like pulling teeth.

The notes on my annual policy statement say,

“Your pension scheme's with-profits policy has a guaranteed benefit which is the minimum amount payable on retirement at a time allowed under the policy or on death”.

It goes on to say that “If you take your benefits at a time when the guarantee applies, Equitable Life works out the amount it pays….etc”.

So I thought I'd keep it simple and factual. I asked Equitable Life to state exactly when the guarantee applied, and sought confirmation that the GV was payable at - or at any time after - my retirement date which was of course the original policy-maturity date.

This was the reply I got:

"I am unable to answer your question specifically regarding your policy as I do not have authority to deal with you in this regard.

I can give you a generic response as to when the guarantee would apply.

As stated in the notes on your benefit statement, the guaranteed benefit is only available on specified events such as retirement and death." [my underlining].

That takes us no further forward, since the time, date or circumstances when the guarantee applies are not specified.

I am retired. But I am not dead (as far as I can tell....).

So I have written back to the Equltable Life requesting a copy of the actual policy document ..... in the possibly vain hope that this might indeed specify the time(s) when the guaranteed value applies.

br1anstorm

Another update - in case anyone else reading this is an Equitable Life customer and/or has a CSAVC policy with them.

I find I have to deal with both Equitable Life (the policy-provider) and MyCSP (the organisation that has taken over administration of the CSAVC scheme from the Cabinet Office). They don't seem to sing off the same hymn-sheet.

Equitable Life say they cannot provide advice. Fair enough. So I have been scrupulous to request from them only facts. Their annual statements give me my policy's Guaranteed value (GV) and Transfer value (TV), and say that the GV - which is higher - is paid out "....on retirement at a time allowed under the policy or on death." Fair enough.

I have retired, but not yet died. The posts in this thread so far describe my efforts to find out if and how I could claim the policy benefits (in particular to ensure I received the GV), and what the amount would be.

The annual statements say that the GV is payable "... at a time allowed under the policy....". So I asked Equitable Life for a copy of the policy document so that I could see the exact provisions.

This was the salient part of the Equitable Life reply:

As you are part of a group additional voluntary contribution scheme there is not a policy document specific to you. The trustees will have a copy of the policy document for the whole scheme.The trustees are responsible for the scheme rules. If you want to know when they allow their members to retire [sic] you will need to contact them."


Not exactly informative, and misses the point. I don't need to know when I'm allowed to retire. I have already retired! I simply want to know whether/when/how I can collect the full GV benefit.

I had in fact already asked MyCSP as the scheme administrators. And these were the key elements of their response:

......you can claim your CSAVC anytime now and could have claimed your anytime from age 55. You have the option to claim an annuity which your fund will be moved to Canada Life who would provide the annuity and have Equitable Life pay a lump sum of up to 25% tax free. Equitable Life do not provide the annuity as they are a closed scheme and have an agreement with Canada Life to set up your annuity. If you wanted your fund to be paid a full lump sum payment, Equitable Life don't offer this option. If this is the option you wanted your policy to be paid, then you would need to transfer to a new provider that offers you to take your fund this way. The Open Market Option Request is similar to the annuity with Canada Life however, you find a provider who will accept your fund and once this is received by them they will pay your annuity straight away.

This also largely misses the point. I did not ask about setting up an annuity. The MyCSP answer appears to say that I can either take the benefits as an annuity (based on GV?) arranged with Canada Life (or another provider); or if I want to collect the benefits as a lump sum, which Equitable will not permit, I have first to transfer my policy fund (but what amount - GV or the lower TV?) to another provider.

No reference anywhere to drawdown. I don't immediately need the funds as cash or a lump sum, and I had not considered an annuity because of poor rates. My preference had been simply to get the money out of Equitable and invest it elsewhere.

In the light of woolly_wombat's earlier comments and the Motley Fool link, I am now wondering whether my best course of action might be to ask to take the benefits as drawdown and shift the money (the full GV?) into my SIPP.... How certain can I be that such a request would result in the payout of the full GV and not just the lower transfer value?

sarahemmm

Why not just write to EL again with the information from the trustees, and ask them which value would be used if you wish to drawdown or if you wish to transfer to your SIPP? Surely they can have no reason to be unable to answer a straightforward question...

woolly_wombat

sarahemmm wrote: »

Why not just write to EL again with the information from the trustees, and ask them which value would be used if you wish to drawdown or if you wish to transfer to your SIPP? Surely they can have no reason to be unable to answer a straightforward question...

Less emphasis on 'having already retired' and more emphasis on 'the option to take my full guaranteed value with-profits fund via drawdown any time I choose to do so now that I have passed the minimum retirement age allowed under this policy' might also be in order.

br1anstorm

Thanks to both sarahemmm and woolly_wombat for latest thoughts and advice.

I like the form of words suggested by the latter - since what I want to do is ensure I get the full GV rather than some lesser transfer amount.

But I'm inclined to think that I should in fact write in those terms to MyCSP as the scheme administrators rather than to Equitable Life. Am I right?

Equitable Life seem not to want to engage in any direct dialogue about action on my policy. They have responded to every message from me with a reply saying, in effect, "....ask your scheme administrator".

The tricky aspect is that MyCSP have said - or appear to believe - that my only options are to request an annuity with Canada Life, to seek an open-market annuity, or to ask for the policy value to be transferred to another provider. I am minded to put the 'drawdown' proposal to them in the terms suggested by woolly_wombat, and see what they say!