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Annuity Direct, co-ordinators of the Equitable Life Action Group, welcome the publication of the compromise agreement.
Any compromise brings rough justice and some policyholders will do better than others. We had hoped that more could have been offered to those who bought policies after November 1998 and would now look to the regulator to assist these policyholders. Having brought the concerns of guaranteed annuity rate policyholders to public attention, we are particularly anxious that policyholders make the appropriate decisions in relation to their policies, pension income and voting for the compromise
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GAR policyholders who are aged 60 or over who do not require a spouse’s benefit would probably be best advised to take their guaranteed benefits now before the compromise is agreed and then vote yes to ensure a more secure future for the Society.
Those who do require a spouse’s benefit need to compare an enlarged fund at current annuity rates, with GAR benefits providing single life income and their spouse being protected through life insurance.
Employer-related GARS who are over 60 and have a GAR policy that can be taken on a joint life basis and with escalation - the policy is potentially very valuable and all policyholders with such policies should take advice as soon as possible.
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Any policyholders who are eligible to take GAR benefits and decide to exercise those GAR benefits prior to the compromise agreement should also vote yes to help the stability of Equitable in the future.
GAR policyholders under 60: GAR policyholders who are not yet able to exercise their GAR rights have a more difficult decision. Some may feel that the extra cash being offered is insufficient to compensate them for the loss of their GAR benefits. Their decision is complicated by the fact that their GAR benefits may ultimately not be available if the Society remains unstable with an uncertain future. Therefore, they need to weigh up this common good alongside their individual policy calculation before casting their vote.
Advice line - compromise services
Annuity Direct continues to offer services and advice to Equitable policyholders over the coming few weeks.
If the compromise is approved then policyholders who receive extra monies and will want to take their benefits quite quickly. Many have delayed retirement, awaiting first of all the House of Lords’ decision and then the compromise. Annuity Direct is very aware that getting opinions from Equitable takes a considerable amount of time and there have been very severe delays this autumn in money being transferred to drawdown or to annuity providers.
We would recommend that anybody likely to consider vesting their funds soon after an agreed compromise should get in touch with a specialist financial adviser soon as this will assist them in starting their pension income when they want it. To this end, Annuity Direct has set up a specialist help team to assist policyholders who require these services.
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Stuart Bayliss, Director, Annuity Direct
Tel: 020 7684 5000
Press Release 7th December 2001
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