EQUITABLE LIFE MEMBERS

INCOME DRAWDOWN GROUP

(Managed Pension Funds)

EQUITABLE LIFE INCOME DRAWDOWN GROUP  (‘ELID’) 

Meeting of ELID with ELAS Managed Pensions Team 30 October 2002

MANAGED PENSION FUND REVIEW

Policyholders with Managed Pension Funds have been sent a questionnaire as part of the ELAS Managed Pension Review. The ELAS Managed Pension Review is to assess whether Managed Pensions were mis-sold. The terms of reference are whether the sale was compliant, i.e. did it conform to the necessary conditions as laid down by the FSA, etc. The letter states that the FSA have instituted a review to ensure that people were sold a product that reflected the degree of risk they were prepared to take. It goes on to say that returning the form does not automatically entitle one to any compensation. 

The FSA became concerned in 2001 about Managed Pension/Income Drawdown Plans/Pension Fund Withdrawal schemes 

ELAS were responsible for introducing these to the market - originally as the Managed Annuity which was then revised to the Managed Pension form.  

Other companies followed suit - many with high charges. This is what caused the FSA concern - especially when small funds where being converted but with large amounts taken out in commissions and fund charges.

The FSA then wished to review Income Drawdown sales but were unsure if there was wide-spread issues regarding mis-selling or concerns. So - as ELAS had sold more plans than any of the other lifecos - they were asked to review their own sales. The terms of reference where fairly loose - ie ELAS had to police itself to the satisfaction of the FSA. Based on the ELAS findings, the FSA would then decide whether to conduct an industry wide review.

It should be noted that the GAR issue is totally separate and is not part of the Managed Pension/IDP review. An IDP will be looked at just to see whether the original sale was justified based on an individual's circumstances.

ABOUT ELID

·        ELID has campaigned vigorously on behalf of policyholders already in Income Drawdown through an Equitable Life Managed Pension who have been unable to take advantage of the transfer provisions enacted in February 2001 without suffering the MVA, have been disadvantaged by retrospective bonus adjustments, suffered unfairly in the July 2001 policy value reductions and now face an immediate substantial reduction in pension income.

·        ELID has lobbied ELAS at the highest level, MPs, Treasury Select Committee Members, the FSA and other relevant bodies and has joined the larger action groups in representations to the Government, the Treasury and the FSA on regulatory concerns.

·        While unable to offer investment advice to Members ELID has provided information on efficient alternative investment routes for those members wishing to consider a transfer.

·        Following completion of the consultation period on the Compromise Proposals ELID has now refocused its Objectives to deal with Members’ current priorities which include Mis-selling, Misregulation and representation at Penrose.

·        Membership enquiries should be emailed to Geoffrey Glover:   broadoaks2@onetel.com