Suggested Letter for use by Equitable Life With Profit Annuitants

The following letter can be used as a sample, but it is suggested that you personalise it to the recipient, as MPs etc tend to ignore 'mass mailings'.

Dear

You may recall that I wrote to you earlier this year about my pension with Equitable Life. Since the start of 2003, annuitants have been collecting data to study the impact of the reduction after the Society announced that it was reducing the payments to With-Profits Annuitants (WPAs) by 20%. The objectives were to determine if there were any patterns and to predict what the reduction might be where it had not occurred already. Subsequently these were extended these objectives to understand the possible future impact on annuitants’ pension payments and explain what had hitherto been contained in the Society’s marketing literature, but either largely misunderstood or not comprehended. The full report can be seen at a new website for Equitable Life Trapped Annuitants’ - www.elta.org.uk.

The Equitable Life Assurance Society (ELAS) has received very wide and adverse publicity for its actions over the last few years. What has been done is reasonably clear, but how and why the Society chose to adopt certain strategies has never been satisfactorily explained. As more and more of the implications of the Society's pre-sale marketing activity and their post-sale activities over the last 15 years are understood, including some very mis-leading material presented at the time of the so called "Compromise Deal", it is easy to understand why annuitants are angry and frustrated and demanding action by the Society, the statutory regulator and the government.

What I have identified and is described in my report can be summarised as follows:

a)      The Society set up the With-Profits annuity system based on its With-Profits fund to enable it to:

                                 i.          Offer higher annuity payments than could be justified by the true accounts, had they been correctly revealed.

                                 ii.          Create a ‘reserve’ to cover any potential exposure by creating a unique structure of annuity payments where one part and increasing part of the annuity was ‘un-guaranteed’ and could be and is being removed to meet its other fiscal obligations.

                                iii.          Failed to properly explain at the time and to the present day the structure of the system and how its works so that annuitants were lulled into a false sense of security as regards their current and future income.

b)      There has been a systematic and systemic failure by the statutory regulator that goes back to the late 1980’s when the Society first announced its With-Profits annuity scheme and that has continued with the new board whose policies and announcements are hardly an improvement on the old.

The Society’s strategy was described in detail by the Society in a paper presented to the Institute of Actuaries in 1989.

I would ask you to present this letter and attachment to the Parliamentary Ombudsman and take any action that you feel appropriate to rectify this gross example of mal-administration. If you have any questions please do not hesitate to contact me.

Yours sincerely