Norwich Union - Reattribution

Melde

I wish to find out a bit more about reattribution by Norwich Union Bond.

I don't understand " incentive payment in return to give up any interest they may have to possible future special distribution". What does future special distribution mean?
Thanking you in advance
Best regards
Melde

Geoffo_M

As I understand it, over many years, their With-Profits Funds have grown rather large. There is always debate whether previous annual or terminal bonuses should have been higher or whether this is just good business -which should be for the benefit of NU shareholders. Probably the correct answer is a bit of both.

They are now trying to reduce the size of the fund by negotiating a "backhander" (or 'incentive payment' as they like to call it) for qualifying policy holders. What is clear is that previous bonuses should clearly have been higher, but how much higher is the question for debate.

If you are a holder, try and avoid selling for now

missile

I assume you have read the blurb from NU? Like most financial documents, there are a lot of pages giving very little useful info.

As I understand it, IF they get approval they will offer an incentive to qualifying members to surrender their entitlement to any future special distribution so that several funds can be merged to save operating costs. IMHO this seems like a good idea and it would seem best to hold whatever qualifying bond you may have until the offer is made, then bite their hand off. I would suggest "future special distribution" is unlikely in the foreseeable future.

cheerfulcat

I would suggest "future special distribution" is unlikely in the foreseeable future.

On the contrary, it is practically a done deal...Norwich Union's orphan assets.

missile

cheerfulcat wrote: »

On the contrary, it is practically a done deal...Norwich Union's orphan assets.

You seem to be confused "re-attribution" may well go ahead, but there is nothing in the link you posted about a future "special distribution", which is an entirely seperate scenario which may or may not happen some time later.

Q. [URL="javascript:expandcontent('div2','qa2')"]How does a reattribution differ from a distribution?[/URL]
A. In a reattribution, the inherited estate is still needed to support the with-profits funds and remains within the business. This means the inherited estate continues to underpin the with-profits fund, until no longer needed. Any payment made to policyholders is paid from shareholders? funds, usually as cash, and the amount of capital held in the fund remains the same.

A distribution occurs when there is sufficient capital to make a payment out of the with-profits fund. Under a distribution, payment in the form of a bonus is made from the with-profits funds and not from shareholders? funds. The part of the inherited estate that is paid out is then no longer available to support the solvency and investment freedom of the with-profits funds.

The article you link to is dated June 2007 and I would suggest that the recent communications from NU would be more accurate. I would add that Nick Louth agrees with my opinion that a special distribution is unlikely.

What you are giving up is a claim on money that you would probably not have benefitted from at all, except in the case of a marked deterioration in investment returns.

ponte_2

I am confused about this norwich union reattribution....can anyone clarify something for me please...

i have a policy that matures at the end off the month, nu have told me more or less what i will recieve, i have no other policys with them..will i still recieve a payment throught reattribution....been told reattribution should be sorted by the summer.

thankyou.

missile

No, as I read the blurb, payment will only be made to those who have a current policy. See NU web site for more info.

chromehorse

Re-attribution is a ghastly scam being perpetrated by NU. The limp and weak FSA Conduct of Business rules that govern re-attributions allow NU to fleece policy holders at will. They have created inherited estates by creaming huge chunks of with-profit funds from the CGNU/CULAC funds that they aquired. They now want to hand as much as possible to shareholders (including, of course all NU employees) and are now trying to bend the rules as much as possible. It's not enough that they are using the policyholders money to (a) meet the costs of their own mis-selling (b) top up NU staff pensions whilst policyholders bonds go through the floor and 90% of mortgage endowments won't meet targets (c) pay shareholders tax bills; they now want to get hold of £4Bn of policyholders money to which they have contributed NOTHING. As Bob Dylan said 'Steal a little and they put you in jail...steal a lot and they make you a king' Moss and Harvey before him get MILLIONS from NU whilst policyholders go to the wall.

missile

That is the financial "services" industry = at best you receive a little while they get a lot. At worst you make a loss while they still make a healthy profit.

chromehorse

Absolutely missile. But this scam is particularly horrible because the sums being ripped off are so vast and about 98% of policyholders either don't or can't understand what's going on. Hoardes of actuaries; lawyers etc taking huge sums out of the premiums of millions of policyholders.

When some poor guy fiddles his pathetic benefits we get TV adverts and all kinds of approbium heaped on him. The Directors of NU already on bloated salaries get MBEs for ripping off the rest of us. It's a scandal.

chromehorse

I forgot to mention that, if you go to Google and search 'Google Groups' for Norwich Union Policyholder - Reattribution, there's a group that's been set up to find out more about the awful NU proposals, share resources, and promote correspondence with FSA, NU, Clare Spottiswoode etc.

http://groups.google.co.uk/group/norwich-union-policyholder-reattribution?hl=en