As part of their efforts to stabilise their business following recent events, Equitable Life have announced a special option for contributions paid to their With-Profits Fund between 8 December 2000 and 31 March 2001.  Under this option, Group AVC policyholders may elect retrospectively for these contributions to be treated as having been paid to their Money Pension Fund.

This is a "unit-linked" fund which invests in bank deposits and other short term capital secure instruments.  Thus it is not exposed to the consequences of underperformance of the With-Profits Fund and the current high levels of surrender penalty, although neither will it benefit from any outperformance of the With-Profits Fund over short term interest rates. Money invested and held to retirement is subject to charges (which are the same as for other unit-linked funds, including an initial bid-offer spread). Transfers can be made to other unit-linked options.

Equitable have indicated that this is only an option, and no decision need be notified prior to 31 March 2001.  However, policyholders must make a request for the option to be made available to them by 26 January, something that was only announced quite recently.

In the circumstances, we are arranging to request the facility (and it is no more than that) as part of a bulk submission. We are not convinced at this stage that it will prove of value, given the steps already taken and the possibility that a penalty could still be applied if the funds ere later moved to another provider.  However, it would be inappropriate not to keep the option open.

Useful links :

A full copy of the Appeal Court judgment can be downloaded, in pdf format, by following the link below.

• Appeal Court Judgment on Guaranteed Annuity Rates

A full copy of the original judgment can be downloaded, in pdf format, by following the link below.

• Court Judgment on Guaranteed Annuity Rates

Contacting the Fund ~ by letter, fax, telephone or email ~ How Can We Help?

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