Posted by Andy Smith on 16 December 2000 at 10:33:34:
The Trustees met last Thursday to discuss the Equitable situation. I hope that they will issue a statement soon, they certainly ought to. I don't want to pre-judge the situation but it does seem likely that there will be a substantial loss of value of AVC funds invested with the Equitable. Furthermore, in order to maintain the guaranteed returns for the minority of Equitable GAR policy holders, there is likely to be an on-going loss of value to the majority.
I feel that there is a case for compensation, for the following reasons:
1. For a long time the Equitable was the only choice for contributors to the IBM AVC scheme.
2. We trust in Trustees to have the necessary business acumen to avoid bad investments. The degree to which the Equitable situation could have been foreseen is not clear to me, a layman. But it should be investigated.
It does appear that the C-Plan fund enjoys a surplus, although diminished by the switching of funds to the M-Plan. Without wishing to split the aims of this group, it does seem to an appropriate aim to use C-Plan surplus (and recovered funds from the M-Plan?) to compensate AVC contributors for their losses.
What do others think?