Equitable Life has confirmed in writing it will not impose a market value adjustment (MVA) on those ...
Equitable Life has confirmed in writing it will not impose a market value adjustment (MVA) on those policyholders transferring funds to take an annuity on the open market or start income drawdown.
The group made the confirmation in a letter to retirement specialist intermediaries Wentworth Rose.
Philip Rose, managing director of the firms said that Equitable's decision to remove reversionary bonuses for the period 1 January 31 July 2000 and the imposition of a 20% MVA had caused concern to those needing to start drawing an income.
He added: "We have now received written confirmation that those wishing to take an income, even if they do transfer away from Equitable Life, will not suffer the MVA and will also be included in any repayments of the reversionary bonus if they are made by a new owner."
Last month an Equitable Life spokesman told Investment Week that full market value was still available to policyholders ending their scheme to buy an annuity.
He added that this counted for policyholders of any retirement age and included those using the open market option.
Rose said that, although Equitable had been saying it would not charge the MVA, the society had been less forthcoming in providing the assurances in writing, especially regarding income drawdown policies.
He added: "We wrote to Equitable Life immediately after the House of Lords ruling but were unable to get clear, written confirmation until the beginning of September.
"This was especially worrying for those wishing to take an income drawdown policy, with which the open market option is not a contractual right and could be seen as just moving from one personal pension to another."
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