Market Research and More Rumours

media release                                                         

6 April 2006

Equitable Life’s trapped pensioners wary of planned sale

Equitable Life Trapped Annuitants (ELTA) has expressed its concern at the continuing uncertainty surrounding the sale of Equitable Life.

Commenting on the persistent rumours about a possible sale, ELTA’s chairman, Peter Scawen, said, "We believe that Equitable should spell out the implications for all its members and particularly for its trapped pensioners, who have seen their pensions reduced by as much as 40% since 2002.

“We were surprised to learn that Equitable has commissioned US-based market research consultants to interview policyholders, including some of our members, and ask them if they would approve of a sale. Without understanding the financial consequences of a sale for individual policyholders, the question is pointless and any answers received are statistically invalid.

“We do not know how our members will benefit from any sale, or fit in with any new arrangements, so we will wait and see what comes of the discussions. Trapped with-profits annuitants are in an especially difficult and vulnerable position. They are pensioners dependent for a large and often increasing proportion of their diminishing income on the discretion of the current board. Yet Equitable has consistently refused to allow them to take their life savings to another life assurance company.”

Commenting on the preliminary results for 2005 released last week, Mr. Scawen said, “Naturally we welcome the improving position of Equitable. However, we are concerned about the Board’s comments regarding litigation by some with-profits annuitants and we wish to clarify their position.

“The pensioners making claims against Equitable are doing so because they allege they were misled by Equitable’s sales force. It is a matter of public knowledge that Equitable has already admitted large scale mis-selling by its sales force and has already compensated other groups of policyholders. Unfortunately, that compensation has further reduced the with-profits funds and has reduced with-profits annuities.

“The Society continues to resist claims by with-profits annuitants, even though as pensioners they are in the most vulnerable position of all. It is wrong to suggest that trapped annuitants are trying to make excess profits at the expense of other policyholders.

“Many financial services firms, including Equitable, face mis-selling claims, but the difference is that Equitable took the commercial decision to self-insure against those liabilities. With-profits annuitants are as entitled to make claims as anyone else. If they do not do so, investing policyholders will have profited unfairly from this most unfortunate group of pensioners, who, unlike the investing policyholders, have no opportunity to move elsewhere”.

Ends

For further information, please contact: Peter Scawen on +33 5 56 71 96 47 or at eltaorg@aol.com

ABOUT ELTA

Equitable Life Trapped Annuitants (ELTA) is a voluntary group set up to represent Equitable Life's trapped with-profits annuitants. ELTA is part of E7, which comprises the seven Equitable action groups, who have joined forces in their fight for government compensation. The chairman and co-ordinator of the group is Peter Scawen.