Updates on Additional Voluntary Contributions
15 October 2009: Equitable Life
On 15 October, the High Court issued its ruling on the Government's plan for the compensation of Equitable Life policyholders. The judicial review took place following pressure from the Equitable Life Members Action Group (EMAG). The main points are:
- The Government's plan to compensate, via an ex-gratia payment, those policyholders who had suffered the most due to the maladministration of the regulatory structure that applied at the time was broadly accepted
- Some elements of the ruling could broaden the scope of the compensation scheme, in particular extending the period over which losses are assessed
- The details of the compensation scheme are currently being reviewed by Sir John Chadwick, who has extended his deadline for responses to his interim report on the compensation scheme to 27 October 2009
More details of the terms of the compensation scheme will be known once he produces his final report.
15 July 2009: Equitable Life
The Parliamentary Ombudsman has now commented further and is highly critical of the Government's initial response that the former management of Equitable Life was primarily to blame for member losses.
The exchanges between the Government and the Parliamentary Ombudsman look set to continue for some time yet.
Visit the Equitable Life website for updates on how they manage with-profits funds and find their Annual Report.
Standard Life - Sterling Fund
Due to a reassessment of the assets held by the Sterling Fund at the beginning of this year, their value fell by around 5%.
This resulted in members also suffering a 5% drop in their personal investment in this fund.
The good news is that Standard Life agreed to restore the original value of the Sterling Fund, thereby putting investors back into the same position that they were in before the original announcement.
Standard Life - Managed Cash Fund
Standard Life recently made an alternative cash fund available which is a lower risk alternative to the Sterling Fund.
It offers preservation and liquidity as its priorities, which investment return as a secondary consideration.
As a result, returns on this fund may be lower than the Sterling Fund in the long term, but are expected to remain positive.
The Managed Cash Fund is available to all members as part of the AVC range.