Equitable Life is preparing to write to its 400,000 policyholders ahead of a vote on whether it should transfer 50,000 holders of with-profits annuities to Prudential.
The troubled firm, which was forced to shut its doors to new business in 2000, originally announced the transfer – which involves around £1.8bn worth of annuities – in March this year.
The move means Equitable Life will likely be left with a basic with-profits fund, holding about £7bn worth of policyholder assets, which could receive a bid shortly afterwards.
A spokesperson for the firm says: “The transfer is now approaching its final stages and, at the beginning of October, Equitable Life will be writing to explain it to over 400,000 policyholders ahead of a vote.”
Charles Thomson, chief executive of Equitable Life, said at the time the firm announced the transfer the move represents a chance for better returns for the holders of the with-profits annuities.
“The proposal from Prudential represents an excellent opportunity for with-profits annuitants to transfer to a fund where they will enjoy far greater investment flexibility and which has a much better recent bonus record,” he said.
“They will become part of an actively managed fund, which is one of the largest and strongest in the U.K.
“It will also help us in the search for the best strategic solution for the remaining 80% of policyholders.”
Equitable Life’s troubles began when the society asked some of its policyholders to take a cut in bonuses since it could no longer afford what it had once promised.
The with-profit annuitants have been regarded as the most troubled of the 300,000 Equitable Life policyholders as they are not able to surrender their policies.
The Government has also come under fire for not doing enough to protect policyholders.
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