MPs said yesterday that inquiries into the Equitable Life debacle were "muddled" and could lead to s...
MPs said yesterday that inquiries into the Equitable Life debacle were "muddled" and could lead to some policyholders being compensated while others lose out. Their remarks came as the Treasury Select Committee published letters it has received from each of the bodies investigating the problems of the stricken mutual, charting their progress, reports the Telegraph.
Thousands of Equitable policyholders are pinning their hopes of compensation on the findings of the inquiries by Lord Penrose, the Parliamentary Ombudsman and the Complaints Commissioner for the Financial Services Authority.
But Stephen O'Brien MP, shadow paymaster general, said policyholders reading the letters will despair. He said: " Whilst each letter on its own is perfectly proper, the combined picture is of a complex morass, with no single body having the authority to do what policyholders and annuitants need, which is to investigate whether there has been regulatory failure and to order redress if appropriate."
Liberal Democrat MP Norman Lamb, a Treasury Select Committee member, said the investigations amounted to "a patchwork of different investigations which can only confuse the victims of the scandal".
SCOTTISH MUTUAL and Scottish Provident have had their credit ratings cut yesterday by Standard & Poor's, one for the second time in as many months, reports the Scotsman.
Scottish Mutual's long term counterpart credit rating was cut from A- to BBB+, while Scottish Provident was also downgraded from A- to BBB+ by S&P's as it considered the pair's parent, Abbey National, was less likely to maintain solvency margins at it subsidiaries.
David Laxton, an analyst at Standard & Poor's, said: "Notwithstanding strong capital support for these life subsidiaries over the past two years, Standard & Poor's considers that Abbey National is likely to maintain lower solvency margins in its closed with-profits funds than has been the case in the past."
THE TIMES reports on research published by AXA which reveals that at least 25,000 companies in Britain are breaking the law by not providing their staff with a pension scheme.
The research found that 16% of companies with an annual turnover of at least £1 million are ignoring rules saying companies employing more than four people must give staff access to a scheme.
Steve Folkard, head of pensions marketing at AXA, said: "It seems that companies of all sizes are unaware of their legal responsibility to provide access to a pension scheme for their staff." Of those firms which do offer a scheme, 71% offer a defined contribution one and only 20% offer a final salary pension, in which the company rather than the employee shoulders investment risk.
PERHAPS company executives have simply been too busy attending functions like that which the pensions industry will be holding tonight. Putting aside the crisis in retirement funds, more than 650 executives have been invited to toast one another at a lavish, four-course banquet complete with musical entertainment, says the Scotsman.
Guests at the "spectacular" black-tie function will dine in the marble-floored hall at the Royal Museum of Scotland in Edinburgh, entirely at the expense of their companies and sponsors.
It is estimated the total cost of the dinner and champagne reception, part of an investment conference held by the National Association of Pension Funds, will be more than £30,000. While companies are paying up to £2,173 for their staff to attend the seminars and meetings at the conference
Campaigners yesterday condemned the extravagance of the pension companies at a time when retirement funds have been decimated.
LEADING executives of the FSA yesterday rejected criticism of the alleged weakness of its fining policy, continues the Scotsman.
The comments by the FSA's consumer director, Anna Bradley, and director of enforcement, Andrew Proctor, came in the wake of a £750,000 fine on insurance giant Prudential last week. The Pru was found guilty of mis-selling endowment mortgages through its former Scottish Amicable brand in 1999 and 2001.
But critics compared its fine with the £22 million penalty the Office of Fair Trading awarded against retailers Littlewoods and Argos for alleged price-fixing, currently the subject of appeal, on certain toys.
However, Proctor said yesterday that the adverse publicity for financial companies fined for wrongdoing was integral to the punishment.
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