Equitable Life with profits pension / takeover.

Julian999

I posed this question to Equitable with the following response

What are the current charges by Equitable if I withdraw funds under drawdown? Is Drawdown possible from the Unit Linked funds? If so, what are the rules and how do I work out the charges?

Equitable do not offer income drawdown, but you can take any number of cash lump sums from your policy providing each one is at least £1,000 and at least £1,000 remains in your policy. There is no charge for taking cash lump sums from your policy with Equitable and the proposed transfer will not change that. Utmost has agreed to administer all transferring policies to an equivalent standard and it will be possible to take cash lump sums from your unit-linked policy after it has transferred. Utmost are developing a flexi-access drawdown product, to be made available in early 2020.

pafpcg

Maffo65 wrote: »

Could you point to the section of the Utmost website which states that only a single cash withdrawal would be available to former Equitable policyholders? I couldn't find it.

Here you go!

From https://www.utmost.co.uk/pensions/find-out-about-your-options/take-your-pension-pot-number-lump-sums/

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.

If you are an Equitable Life policyholder, and the Proposal goes ahead, the options you currently have will continue to be available.

Not exactly clear and explicit is it?!

The proposal documentation may be voluminous but there are these glaring gaps in what policyholders need to know when considering the lengthy timespan of a pension. To ignore the whole issue of how policyholders will be able draw benefits mystifies me. For example, just how long are Utmost bound by any undertakings given in the transfer - we know the investment charges are constrained for twelve months but is that all? Is there a time limit on maintaining the policy terms & conditions or is it in perpetuity?

Equitable, in conjuction with Utmost, need to be addressing these issues in a FAQ and not leaving it to individuals to speculate. Nor are replies to individual enquiries adequate since these may not necessarily be honoured by Utmost.

Maffo65

pafpcg wrote: »

How long are Utmost bound by any undertakings given in the transfer?
[...]
Is there a time limit on maintaining the policy terms & conditions or is it in perpetuity?

To be fair, I'm not sure if any new provider would be willing to abide to the same T&Cs in perpetuity in a situation like this.

pafpcg wrote: »

Equitable, in conjuction with Utmost, need to be addressing these issues in a FAQ.

At this stage it seems unlikely that either company would do that.
They clearly spent a lot of time and money to come up with the existing documentation, and I doubt if they would put out any amendments or integrations.

The way I see it, the switch to Utmost involves both opportunities and risks for existing policyholders.
But you could argue that the same would apply to Equitable, if the Proposal got rejected.

IMHO, for anyone who's planning to take out their pot in one or more lump sums over the next couple of years the Proposal is very compelling in financial terms, with an acceptable degree of risk.
Beyond that timeframe, any risk vs opportunity calculation becomes progressively more difficult, as always.

feet_up

Update on my enquiries about the NHS AVC issue.

[FONT=&quot]NHS pensions ([/FONT][FONT=&quot]NHSBSA)[/FONT] [FONT=&quot] have replied.
[/FONT]
[FONT=&quot]"As my colleagues have advised the Equitable Life AVC is not part of the NHS Pension Group scheme and NHS Pension AVC are with Standard LIfe and Prudential."[/FONT]

[FONT=&quot][FONT=&quot]"The NHS Pension is part of Department of Health and Social Care and does not have trustees as such,"[/FONT][/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]On the same day I received a reply from [/FONT][FONT=&quot]the Policy Manager - NHS Pensions Policy[/FONT]
[FONT=&quot]Department of Health and Social Care[/FONT]

[FONT=&quot][FONT=&quot]"....the Department of Health and Social Care only recently received information from Equitable Life for consideration. The Secretary of State for Health and Social care is a trustee of the Equitable Life scheme, and therefore has the option to vote on the proposal. We are currently considering the proposal and are seeking professional advice on the implications of each decision. The deadline to vote is 30th October 2019, and we plan to communicate our intention ahead of this date."[/FONT][/FONT]
[FONT=&quot][FONT=&quot]
[/FONT][/FONT]
[FONT=&quot][FONT=&quot]I hope this makes everrything clear :rotfl:
[/FONT][/FONT]

Notnobody

Just found this thread so apologies if duplicating. I haven't taken my money from EL as not sure what to do with it. I have another modest pension fund which gives me about £1000 annual income, but was told I could not add the EL pot to it. On its own, it would provide a really tiny pension.

If I take the money now, I guess I won't get the promised increase to my fund. I'm baffled by the hundreds of pages of literature! They seem keen on us accepting the proposal.

I believe I can only take part of the fund at any one time? The problem is I live in France, on a small income, so can't open a new UK savings account. I currently get 0.5% interest.

Another point - if I die before withdrawing the money, does it go to my children or is it lost?

JohnWinder

If you only need a transaction account, rather than a savings account, you might be well served by a transferwise.com multi-currency account(s) allowing you do deal in pounds and euros without fuss. You could open such an account from France.

nigelbb

Notnobody wrote: »

I believe I can only take part of the fund at any one time? The problem is I live in France, on a small income, so can't open a new UK savings account.

As you live in France remember that if you liquidate the whole pension pot in one go then you pay only 7.5% tax whereas if you drawdown in smaller amounts you will be liable to income tax at your normal rate which starts at 14%. On the other hand if your income is small you may not be paying any income tax.

allgreek

I've spent a month reading the documentation from Equitable, and I still haven't finished. I haven't seen the Transfer Independent Expert's Report mentioned on this Forum, so perhaps no one else has got that far either!

On page 192 of the Part 2 Document (or page 10 of the pdf version) Section 6.2 of this Summary says:

the ULP NPF is required to provide capital support in the event that any WPSF is unable to meet its own regulatory requirements

The ULP NPF (Utmost Life and Pensions Non-Profit Fund) is where the transferring policies will be allocated after the transfer.

The acronym WPSF is used 10 times in the Summary but it is not explainied in the Glossary. The main report contains this in its Glossary:

With-Profits Sub Funds (WPSFs) are specifically the with-profits funds within Utmost Life and Pensions, known as WPSF 1, WPSF 2, WPSF 4 and WPSF 6.

I think this means Utmost will be able to use the funds transferred from Equitable to support existing With-Profits funds which fail to meet their obligations. The Non-Profit fund will rely on the parent company or borrowing to meet unfulfilled obligations.

As I plan to take my money out after the transfer (I'm 65) this is unlikely to have much impact on me but may affect others.

I live in Poland. Does anyone know where I can find out how tax on cash withdrawals will be calculated? The Poland/UK dual tax agreement seems to say it will be taxed in the UK, but I don't know how that works.

JohnWinder

You could start here for some information: a website of the UK government related to 'poland tax treaties'.

Under such treaties with some countries it is possible to apply (by proforma) for relief of taxation at source to avoid double taxation, but only after tax has started to be collected in UK. Alternatively, by declaring tax already paid in UK, while completing your annual taxation report to the Poland revenue collector, you might reduce your liability for Poland taxes by the amount you've paid in UK.

Scot_39

There appears to be a trickle of Q&A appearing to reflect some of the items that have been answered to individuals and posted here - now available on the Eq Life website - see section regarding

"Information about the proposal"



https://www.equitable.co.uk/ProposalAug2019/index.html




It includes :-

some generic information on funds - and a hint at fund performance - for some only - but these in top 2 quartiles - so basically by no means "dogs",


confirms retaining UFPLS / lump sum arrangements


and drawdown - for those interested as a couple of posts above - refers to Utmost developing a drawdown scheme - which will be open to EL members.




Oh - and if allgreek really wants it - the full indendent expert report is linked from the same web page - it is there - under documents - the mailshots only included the summary of it. Not sure if link will work - the full report is another 135 pages.



https://www.equitable.co.uk/ProposalAug2019/pdf/The%20Transfer%20Independent%20Expert%20Report.pdf




Good luck all.