Equitable Life with profits pension / takeover.

Scot_39

FSCS
Surely the point the judge was tying to make is that the new scheme / organisation is meant to be solvent - in order to protect the members - well strictly now clients - money.
Otherwise management of schemes could take it as a sign that they were allowed to mismanage them - and in simplistic terms "steal" the money from their clients - then having the FSCS step in to pay it back.

MA
It is concerning that some of the UK pension companies appear to be relying on the MA to get to a positive solvency - as it clearly has some detractors - see the graph / extract from FT article on eumaeus.org "blog". Including the Rothsay group in the above judge comments etc

http://eumaeus.org/wordp/index.php/2019/10/27/pra-playing-fast-and-loose/

Regulators / Judge Approval
Ultimately if MA assumptions prove wrong - by the judge siding with the PRA Solvency models - at least perhaps gives us a route back to the government for compensation - but who would want to rely on that ( took years - too many for some members - and many of us only got around 20p in the pound back )

Utmost
The real question we really need to know is therefore just how solvent is Utmost ?
The new scheme is meant to have a solvency ratio of 150 - better than the current EL wide 137 - as per the Supplementary report updates in November. (Albiet I suspect with a lot less cash in reserve - as new scheme I suspect has a completely different risk basis in terms of investments and a lot less liabilities e.g. the removal of GIR style liabilities).

Scot_39

Alternative Home in SIPP

My combined fund - if get the > 80% uplift as per illustration - plus my EL unit linked funds - will be well over the £85k FSCS limit for SIPP - but the FSCS website doesn't give much detail.
Many people I suspect have by now ammassed much bigger style SIPP balances than the FSCS £85K - surely they must be protected in some way ?

I have googled for an answer and so read a few websites and general articles in press etc - and some of the common low cost fund management style providers FSCS statements (HL, AJBell etc ) and now confused again.

If say I put all money in one SIPP - but then split my investment money in several funds - using different fund managers - would this actually help or not - e.g. if a SIPP provider like HL or AJ Bell etc went belly up ?
Say had 10k in cash, and 10-20k with 5-10 different fund managers - would each lump have 85K protection ? ( If SIPP provider or individual fund managers collapsed ).

I was naively hoping it would - but given above comments about diversity - and given a number of smaller SIPP company failures last year that came up when googled for an answer - not sure it is worth risking.

Would it be better - despite the hassle - to split funds with 2 or more different SIPP providers ?

[Deleted User]

AJ Bell, HL et al are brokers. They provide a service but you own the actual assets. If they go belly up, it’s not your problem. There could be delays, your cash portion could have been lent out but chances are you’ll get it all back.

If a fund manager were to collapse, you will also be ok for a similar reason - unless he was stealing and misreporting your assets. Government provides a level of protection against it.

Your real risk is poor investment choice, behavioural challenges and economic calamities rather than the agency you use to buy assets.

eumaeus

Scot_39 wrote: »

FSCS
The real question we really need to know is therefore just how solvent is Utmost ?
The new scheme is meant to have a solvency ratio of 150 - better than the current EL wide 137 - as per the Supplementary report updates in November. (Albiet I suspect with a lot less cash in reserve - as new scheme I suspect has a completely different risk basis in terms of investments and a lot less liabilities e.g. the removal of GIR style liabilities).

As a newcomer I am still not allowed to post links, but there is a link on the Eumaeus blog to an edited transcript of my oral submission to the court, where I argue that the actual solvency coverage ratio, without the benefit of MA, is around 21%.

Counsel for the applicant dispute this figure, but it is taken from their own regulatory reports.

But as Mordko rightly says above, unit-linked policyholders probably have nothing to fear, as they are taking the market risk on their own account.

Truncated link: eumaeus.org/wordp/wp-content/uploads/2019/12/buckner%20oral%20submission%2020191225.pdf (add http://)

keiran

Still no info from the NHS Group Scheme Trustees. Anyone else got this?

Very surprised , and now of course nothing will happen due to Xmas...

zho

When the Equitable first got in touch regarding this scheme, I think they said that if it was voted in then holders of with-profits policies would receive an uplift in the capital distribution of between 60% and 70%.


We're only a couple of days away from transfer to Utmost but I haven't seen any reference to the final value of the uplift. Does anyone know what it's going to be.



TIA.

zho

To answer my own question ..... I've rung the helpline and the recorded message says that the value of the uplift to capital distributions will not be known until later in January.

pafpcg

As far as I'm aware, the latest information we have on the level of the primary uplift was published in "Final Supplementary Report of the Chief Actuary of Equitable Life Assurance Society" on 15-Nov-2019. The report gave the details of the then latest calculations, as at 30-June-2019. On pages 26-27 of the report: "The value calculated at 30 June 2019, based on estimated policy values at 31 December 2019, was circa 72%". But there will have been further changes in the six months to the Implementation Date on 1st January, so we won't know what our policies will be worth until Utmost publish the final figures sometime in January.

EDIT: One of the other supplementary reports in October suggested: "In practice, Utmost Life and Pensions will apply the 1 January 2020 uplift at around 2 weeks after this date." That probably means we won't know our individual policy values until after mid-January, but Utmost may publish the uplift percentage value sooner.

zho

Many thanks pafpcg,


That's vey helpful.

pensionpawn

Looking at the Equitable Life website today and it's all change https://www.utmost.co.uk/pensions/
Can't see anything relating to the uplift yet.... Happy New Year to you all.