More news about the with profits annuity, guaranteed annuity rates, and Equitable Life. Yes, them and their pension annuity fiasco again, but this time with a bit of good news. More than 400 with-profits annuity policyholders have reached a “settlement” in their case against Equitable Life just two weeks before it was due to be heard in the High Court. Details of the settlement for these 407 annuity claimants, who argue they were mis-sold their pension annuities by the firm between 1990-2000, remain undisclosed.
The group had brought proceedings in the High Court way back in 2004 and the trial was set to commence on 28 January this year. The claimants’ complaints were, firstly, that the general complexities and risks attached to the with profits annuity product were not fully explained to them. Secondly, they argued the additional risks posed by them having to be dependent for their income on Equitable Life’s with-profits fund, and the actual weakness of that fund, were also not explained to them.
Equitable Life’s with-profits annuity is an investment linked annuity contract with the income provided being linked to the ongoing performance of its with-profits fund. Equitable has recently obtained the support of the overwhelming majority of its with-profits annuity policy holders to the transfer of these contracts to the Prudential. Robert Morfee, the partner at Clarke Willmott representing the claimants, says that the claims were exceptionally complicated and involved a detailed analysis of a very intricate product and the regulatory process surrounding the advice which must be in place before the sale of such a product.