The NAPF is advising its members to take legal advice to decide whether it needs to express an inter...
The NAPF is advising its members to take legal advice to decide whether it needs to express an interest in a case challenging the right of Equitable Life to remove guaranteed annuity rates (GAR) from AVC policies.
Last week, lawyers representing some Equitable group AVC schemes said they may challenge the withdrawal of GAR rights from group schemes between 1988 and 1993. If the lawyers were to be successful in this challenge it would change the status of Equitable members who voted in the compromise deal earlier this month. This would then undermine whatever the outcome of that vote.
Pension lawyers Linklaters questioned whether Equitable had the right to remove GAR rights without receiving the explicit consent of group trustees. They pointed out that trustees have a fiduciary responsibility to their members and that the issue could be worth thousands of pounds to members.
However, the mutual claims that members who joined group schemes after the GAR was withdrawn were bound by the alterations, which removed these rights.
The mutual has said it would seek to have the matter dealt with in court before any hearing to approve the compromise agreement. The result of the vote on the compromise is expected early this week.
Equitable Life policyholders had a deadline of 11 January to vote on the compromise deal
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected