Posted by Bob Maddock on 22 December 2000 at 09:22:40:
In Reply to: A-Plan with Equitable Life posted by Phil King on 21 December 2000 at 18:01:14:
IBM sent out a note to employees yesterday about Equitable Life,
and the bit which surprised me was the bit saying that some IBM
employees have Equitable GAR. This is the first I've heard of
this, and I don't understand it yet.
Copy of the note is attached below.
Sent by: UK EMP COMMS
To: IBM UK employees
Subject: EQUITABLE LIFE - ADDITIONAL VOLUNTARY CONTRIBUTION UPDATE
A Message from David Newman, Pensions Trust Manager.
Further to the Bulletin from Kevin Waller, dated 8 December 2000, this announcement will be important to those members of the pension plan who have Additional Voluntary Contributions invested with Equitable Life. It is not relevant to members of the M Plan.
At its meeting on 14 December 2000 the Trustee, in conjunction with its advisers, reviewed the ongoing situation concerning Equitable Life. As previously advised, the Equitable Life with-profits fund remains closed to further contributions at present.
On the basis of advice received the Trustee has concluded that whilst it might be in the interest of some members to transfer their existing funds from Equitable Life, equally, there are a number of members for whom this would not be the appropriate course of action.
Among the key factors to be taken into account in making any decision are;
Ÿ The period of time before a member's anticipated retirement date
Ÿ The level of any Market Value Adjustment factor that would be applied to any transfer of funds
Ÿ The impact of potentially higher rates of returns (relative to Equitable Life's) that might be available from an alternative provider
Ÿ Whether or not a member has a Guaranteed Annuity Rate (GAR). This applies to members who originally commenced paying Additional Voluntary Contributions with Equitable Life prior to February 1992.
The situation with Equitable Life is very uncertain and the Trustee, with its advisers, is in discussion with Equitable Life regarding the terms for potential transfers of AVC monies from Equitable Life, to an alternative provider, where this might be appropriate.
Once these discussions have been concluded the Trustee will be in a position to inform members of the actions, if any, that it proposes to take. In reaching its decision, it will seek to take into account the wishes of individual members. In general it may be appropriate for those members who are relatively close to retirement or have a GAR to retain their existing funds with Equitable Life, whilst for others it may be appropriate to transfer their funds to an alternative provider.
The Trustee appreciates that many members will be concerned at the long term impact on their retirement planning resulting from the current situation. During January 2001 I will be writing to those members with Additional Voluntary Contributions invested with Equitable Life informing them of the Trustee's decisions including details of the process by which members may make their views known. In the meantime, it is not possible to provide further detailed information. If you have not received your letter, outlining the Trustee's decisions by the end of January 2001, please contact the Pension Services Department on 258164.
General information may also be found on Equitable Life's own website;
http://www.equitable.co.uk