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Equitable Life with profits pension / takeover.

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Equitable Life with profits pension / takeover.

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pensionpawnpensionpawn Forumite
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I thought I would open a thread for everyone who have a pension with them who may wish to share their experience and offer advice while we wait for the resolution of the take over.

I was within days of commencing a transfer to a Sipp last summer when the news broke and have stayed put watching my fund continue to grow at 3.5% whilst this all sorts itself out.

I have seen no news since around last October. Does anyone else have anything to add?

Equitable Life
«13456751

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  • MordkoMordko Forumite
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    There was another letter saying all is well and proceeding as planned. I think it was relatively recent, maybe February? Not sure.
  • Joey_SoapJoey_Soap Forumite
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    Good idea to start a thread. I have Equitable AVCs attached to a previous employment defined benefit scheme as a defined contribution AVC pot. I can't touch the AVC pot until I draw the defined benefit pension. I'm planning to draw the pension from the DB scheme maybe Ausust/September 2020. I don't know if the Equitable spin off and increaee in the AVC pot value will have happened by then. As far as I know, there isn't actually a published definite timescale.
  • MordkoMordko Forumite
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    Transfer is supposed to have happened by the end of this year but nothing is ever “definite”. Vote should take place in summer.
  • POPPYOSCARPOPPYOSCAR Forumite
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    Thank you for starting this thread.

    I am a little frustrated by Equitable as I feel apart from advising us to 'think twice' before doing anything until the possible transfer they have given very little information.

    I would like to know if we will still be able to take partial withdrawals as can be done at present for example.
  • edited 13 April 2019 at 3:40PM
    pafpcgpafpcg Forumite
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    edited 13 April 2019 at 3:40PM
    I have seen no news since around last October. Does anyone else have anything to add?
    The latest situation, as reported by Equitable Life in the letter sent to the with-profits scheme holders several weeks ago, is as stated on the web-page in the link you posted - the date of the update is 7th March. It'll be a few months before the proposals are published, with the vote towards the end of the year.
    POPPYOSCAR wrote: »
    I would like to know if we will still be able to take partial withdrawals as can be done at present for example.

    If I read correctly the answer to Question 7 in the Q&A page at https://www.equitable.co.uk/helpful-qas/ then it's "Yes", but you will lose a potential 25-35% uplift in the capital distribution on anything you withdraw before the completion of the transfer to Reliance Life. On the other hand, if the scheme members vote against the proposals, then the capital distribution will not be increased and may even go down! It wouldn't surprise me if the Equitable Life board use that fear to encourage members to vote for the deal.

    Of course, what we don't yet know is what Reliance Life (aka Utmost Life and Pensions) will be offering in terms of investments, returns and drawdown arrangements. To offer Equitable Life a substantial sum to take-over the with-profits scheme, they must be confident that the bulk of the existing members will be retained. Will there be incentives to stay or disincentives to leave? We don't know......

    Here's the text of the answer:

    "Q7: What happens if a policyholder leaves before the values are uplifted?

    "The opportunity to increase the current 35% capital distribution to a level expected to be between 60% and 70% would be lost. Policyholders should exercise great care before taking benefits in advance of the proposed uplift and an Independent Financial Adviser may help with this decision. One important consideration, where there is an urgent need for cash, is to draw down only a portion of savings. Most pension policyholders over age 55 are able to make withdrawals of £1,000 or more, leaving the balance of their with-profits fund to benefit from the uplift if the Proposal is implemented."
  • POPPYOSCARPOPPYOSCAR Forumite
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    pafpcg wrote: »
    The latest situation, as reported by Equitable Life in the letter sent to the with-profits scheme holders several weeks ago, is as stated on the web-page in the link you posted - the date of the update is 7th March. It'll be a few months before the proposals are published, with the vote towards the end of the year.



    If I read correctly the answer to Question 7 in the Q&A page at https://www.equitable.co.uk/helpful-qas/ then it's "Yes", but you will lose a potential 25-35% uplift in the capital distribution on anything you withdraw before the completion of the transfer to Reliance Life. On the other hand, if the scheme members vote against the proposals, then the capital distribution will not be increased and may even go down! It wouldn't surprise me if the Equitable Life board use that fear to encourage members to vote for the deal.

    Here's the text of the answer:

    "Q7: What happens if a policyholder leaves before the values are uplifted?

    "The opportunity to increase the current 35% capital distribution to a level expected to be between 60% and 70% would be lost. Policyholders should exercise great care before taking benefits in advance of the proposed uplift and an Independent Financial Adviser may help with this decision. One important consideration, where there is an urgent need for cash, is to draw down only a portion of savings. Most pension policyholders over age 55 are able to make withdrawals of £1,000 or more, leaving the balance of their with-profits fund to benefit from the uplift if the Proposal is implemented."


    No that talks about the current scheme not the new scheme.
  • edited 13 April 2019 at 3:53PM
    pafpcgpafpcg Forumite
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    edited 13 April 2019 at 3:53PM
    POPPYOSCAR wrote: »
    No that talks about the current scheme not the new scheme.

    You're too quick! Your response crossed with my editing of my post above after I realised that maybe you weren't asking the question I thought you were asking!

    We (the scheme members) won't know for several months. I doubt even the Equitable Life management know - only Reliance Life will know how they intend to retain our funds. How will they stop a mass exodus if what they offer is poor?

    Perhaps take at look at what Reliance Life is offering to its customers at the moment?

    Edit: "Reliance Life" renamed itself "Utmost Life and Pensions" last month. Their pensions offerings are here: https://www.utmost.co.uk/pensions/
  • MordkoMordko Forumite
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    I asked them about charges for switching out after the takeover. Here is the response:

    Thank you for your email of 21 February 2019.



    “We fully expect you to have the same retirement options as you do today. No charges are currently applied for transferring or switching and although such charges are allowed under the contract, Reliance Life have assured us there are no plans to introduce them. However, that is not to say this position will not change in the future.”
  • POPPYOSCARPOPPYOSCAR Forumite
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    pafpcg wrote: »
    You're too quick! Your response crossed with my editing of my post above after I realised that maybe you weren't asking the question I thought you were asking!

    We (the scheme members) won't know for several months. I doubt even the Equitable Life management know - only Reliance Life will know how they intend to retain our funds. How will they stop a mass exodus if what they offer is poor?

    Perhaps take at look at what Reliance Life is offering to its customers at the moment?

    Edit: "Reliance Life" renamed itself "Utmost Life and Pensions" last month. Their pensions offerings are here: https://www.utmost.co.uk/pensions/


    Thank you.

    Just looked and it says this.

    "Take your pension pot as a number of lump sums

    You can move your money to another pension pot and take lump sums from it as and when you need, until your money runs out or you choose another option. You can decide when and how much to take out. Any money left in your pension pot remains invested, which may give your pension pot a chance to grow, but it could go down in value too. Each time you take a lump sum, normally a quarter of it is tax-free and the rest will be taxable.

    You will need to transfer to a different pension provider to do this."

    So going by that we will not have the same terms as it stands now unless there are special terms for us although I cannot see that happening.
  • pafpcgpafpcg Forumite
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    POPPYOSCAR wrote: »
    So going by that we will not have the same terms as it stands now unless there are special terms for us although I cannot see that happening.
    Thanks for your investigation.

    So, if the Reliance/Utmost pension-paying arrangements are unacceptable, would you vote against the takeover?

    I'm wondering if public speculation, at this stage, might be counter-productive. If something were to be published in, say, the Daily Telegraph or other media likely to be read by large numbers of Equitable Life policy holders, which showed Reliance/Utmost to be restrictive in what they offer, would the proposed takeover then be voted down? Or perhaps there was a recommendation: "vote in favour of the takeover to get the increased pension pot but immediately to transfer your pot to another provider", in which case might Reliance/Utmost panic, reduce their offer or pull-out entirely on the fear of losing too much business?

    We don't know what commitments there are already in place between Equitable and Reliance/Utmost which might mitigate such factors (other than that Equitable has insurance in place to cover any fall in the value of the fund's investments - such insurance probably means that Equitable must proceed with the vote within the timescale stipulated in the insurance). However, I would expect that there are some terms in any existing agreement between Equitable and Reliance/Utmost which limit what Equitable can announce and, crucially, give details on what avenues will be available to policy holders to transfer-out to a third-party provider after a takeover is agreed, ie "take the money and run!"

    My partner has a with-profits policy with Equitable Life which if the takeover goes ahead might increase in value by several tens of thousands; so, we're going to be try to be patient until the final offer is published and then seek advice and debate our options - switch to Reliance/Utmost for a few more years, buy an annuity immediately, transfer funds to her SIPP or some other option. For those needing their pension funds this year, it must be highly frustrating.
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