Posted by Jeremy Burgum on 12 March 2001 at 08:53:33:
In Reply to: AVCs - leaving IBM avoids the 10% MVA posted by Steve Davies on 10 March 2001 at 21:11:58:
You may be interested to know that in Pensions Matter Five (a publication that IBM used to issues to employees), dated May 1995, it discussed AVC's. To quote from one section, it says:
"Why does the Trustee invest my contributions with Equitable Life?"
"...... While the Trustee recognises that a small number of other insurers may seem to provide a higher return (although you should note that past performance should not be taken to mean future returns will be of an equivalent amount) on a year to year basis, this ignores some of the other terms of the contracts, such as a penalty on early withdrawal, which is not a feature of the contract with Equitable Life."
So why is a 10% exit charge being levied at all?