Rectification Scheme

Many people who had a GAR pension fund but then transferred to Income Drawdown (Managed Pension) will have received a letter from Equitable stating that they are not due any compensation under the rectification scheme and if they think they are, they need to make a case out within 28 days.

A typical letter will say "We wrote to you in June saying we would make you an offer. We have looked again and you are refused. If you want to claim in the Managed Pension Review, answer this questionnaire within 28 days."

Equitable have agreed that provided you register with them within twenty eight days you do not need to have made the case in that time period.

1. Write to Equitable stating that you wish to claim within the Managed Pension Review, but that this will take over 28 days to prepare. Ask Equitable for an acknowledgement of your letter. Include your name, address and policy information.

4. If you do not have an acknowledgement within ten days of sending the letter contact Equitable requesting one.

5. It is recommended that you take individual professional advice, if in any doubt.

ELID policyholders and ex policyholders have of course been filling in these Q?s for many weeks and have exchanged views on the purpose of the questions and how best they should be answered without destroying one's case in the process.

First thing to remember is that the basis of the MPR is whether a MP was suitable for the circumstances of the policyholder in terms of attitude to risk, availability of other assets to balance risk etc. (see my note after the meeting with ELAS in late October). It stems from doubt by the PIA whether sales material gave enough emphasis to risk factors.

The questions are those devised by the FSA and most people responding so far have qualified in a covering letter or added to the questions in order to give a balanced view. In particular Q5 is inadequate if it is intended to assess a potential policyholder's attitude to risk.

Would anyone not want the highest level of security to apply to a pension investment consistent with retaining some prospect for growth in line with or slightly ahead of inflation? Attitude to risk in other investment areas is likely to be the opposite to that applied to one's pension fund. Note the jump between 5a and 5b in risk attitude.

Members have found that obtaining their IRS (Interview Record Sheet) from ELAS is useful as it provides evidence of the depth of enquiry by EL as to the financial circumstances of the potential policyholder at the time of commitment. I assume that these sheets were also completed for transferees from GAR policies.

I do not believe the 28 day period is of the essence although it is clearly sensible to get it back asap. I received a follow up reminder after 3 weeks - what a waste wp fund money given they say they have to look at 22,000 cases.

ELAS and the FSA have yet to agree the basis on which any MPR review compensation is calculated. The FSA says ELAS has enough information to be going on, ELAS admits the ball is in its court but that it could not settle cases yet despite its intention to complete the exercise by the end of 2004.

The wholesale rejection of Rectification claims is yet another smokescreen as also will be the MPR as the only appeal will be to FOS whose hands are tied while the FSA is interferring with the compensation process by dreaming up MPRs, s425 schemes (big silence here!) etc.

Time for a policyholders revolt directed at the FSA....How on earth can policyholders prove that they would take benefits in an alternative form if they had had different information from ELAS at the time? Lewis Carroll's jaw would drop if he read this script.