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Equitable Life stops taking new business

United Kingdom
08/12/2000
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The Equitable Life on the 8 December announced that it had failed to find a buyer following the withdrawal of the Prudential from the sale process. As a result, the Equitable announced the following changes to its operations:

1. It will accept no new business (although existing members can continue to pay premiums).

2. With profits funds will be switched away from equities to a bond/gilt basis.

3. The loss of growth on with profits funds for the period from 1 January to 31 July 2000 (following the House of Lords decision in July) is unlikely to be restored.

4. The penalty on surrenders and withdrawals will be increased from 5% to 10%.

5. It will seek a buyer for elements of its business, but the with profits fund is unlikely to transfer and so will remain on a mutual basis.

The full text of the announcement can be found on the Equitable's website - www.equitable.co.uk

Trustees of pension schemes with policies with the Equitable may wish to contact their actuary or consultant to discuss the options open to them.

For further information, please contact Mark Grant by e-mail at [email protected] or call your usual contact in the pensions team.

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