EMAG - Quotes

The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

Quotes

"EMAG seeks support ahead of debate;

Equitable Life policyholders are being urged to lobby their MPs to back fairer compensation for victims of the failed insurer, ahead of a crucial House of Commons debate in September.

MPs will hear the second reading of the Equitable Life Payments Bill on 14 September and campaigners have expressed concern that the Treasury will ignore a letter from the Parliamentary Ombudsman in July which said the recommended compensation payments were 'unsafe' and 'unsound'.

Paul Braithwaite, spokesman for the Equitable Life Members Action Group, said:

'We are more than frustrated that whereas Sir John Chadwick was given an extension for his report, we have been asked through August, through a bank holiday, to make a submission to the Treasury on what we proposes as an alternative scheme. We will make a submission. We will be informing MPs in advance of the debate and encouraging them to participate.'

The House of Commons published a report on the history surrounding compensation payments for the collapse of Equitable Life ahead of a reading of the bill, which will provide the authority for a payments scheme for eligible former and current policyholders.

The 55-page document said:

'This paper outlines the commercial problems of Equitable Life, the series of investigations into the regulation of its activities and the work of the office of Sir John Chadwick in devising principles for designing a workable system of payments.'

Mr Braithwaite added:

'We are appalled that the Treasury is seemingly bent on toughing it out. The paper seems grounded in the Chadwick report and given the ombudsman’s view that Chadwick is unsound, this must be torn up.'

Sir John Chadwick's report, published in July, recommended that policyholders should receive £400m compensation. His conclusions were rebutted by Ann Abraham, parliamentary ombudsman.

She told MPs:

'It seems to me that those proposals, if acted upon, would not in any sense enable fair and transparent compensation to be delivered.'

Mark Hoban, financial secretary to the Treasury, has de-scribed the Chadwick report as 'just one of the building blocks in resolving what is a complex matter'. He is expected to set out the funding for compensation at the government’s spending review on 20 October.

The government has also set up an independent commission to advise on the best way to allocate payments to policyholders and help to develop the design of the scheme. It will report back by January 2011."

FinancialAdviser , by Marc Shoffman Aug 26, 2010

"Dear Member,

Government compensation scheme for Equitable policyholders – your urgent response needed At the end of last month, the Financial Secretary to the Treasury, Mark Hoban, announced in Parliament the long-awaited timetable for government compensation to Equitable Life policyholders as a result of the Parliamentary Ombudsman's findings of regulatory maladministration. The Minister also published Sir John Chadwick's report on a proposed Equitable Life payment scheme (as instructed by the former Labour Government) as well as preliminary estimates of potential policyholder losses. The estimate of loss based on Sir John's specific advice was just £400m to £500m. That works out at about £250 to £350 per policyholder.

The Parliamentary Ombudsman, who reported on the Equitable over two years ago and recommended a compensation scheme, wrote to MPs immediately after Mark Hoban's speech to say that Sir John Chadwick's advice was ‘an unsafe and unsound basis on which to proceed'.

The Board of the Equitable, on behalf of its policyholders, has long advocated compensation based on relative loss which the Parliamentary Ombudsman described in her report as ‘a loss that they would not have suffered had they saved or invested elsewhere'.

The Minister announced that relative loss is estimated to be in the range of £4bn to £4.8bn – around 10 times the compensation based on Sir John Chadwick's advice. The Minister has said that Sir John's advice is just one building block. But, the Parliamentary Ombudsman has said that Chadwick's approach ‘cannot provide a basis for the implementation of my recommendation'.

Compensation will be debated in Parliament on 14 September, and this will be followed by an announcement on 20 October of the total amount that the Government is going to pay out. So time is short.

Mark Hoban has invited representations to him following his speech and your Board will certainly be doing that. However, we think a fairer outcome is much more likely to happen if you add your personal voice directly to the Minister. All you need to do is write and say that you expect and deserve fair compensation as recommended by the Parliamentary Ombudsman and promised by the Coalition Government; and not a figure based on the Chadwick advice which the Ombudsman described as 'an unsafe and unsound basis on which to proceed'...

Chris Wiscarson

Chief Executive of Equitable Life"

www.equitable.co.uk

"Dear Mr Cameron,

I was delighted when you were elected Prime Minister and had hoped that we could put behind us the dishonesty and spin which have characterised politics in this country for so many years.

Not so. As a member of EMAG I feel thoroughly let down. You, your senior colleagues and some 380 MPs including my own, signed the pledge which gave us hope that we would, after some ten years be justly treated. Instead the Treasury, whose incompetence has caused so much suffering for over one million Equitable Life pensioners, has been allowed to continue to dictate the terms of reference and base its assumptions on the discredited 'Chadwick Process'.

The Parliamentary Ombudsman has, quite rightly, vigorously condemned this chicanery. I ask you, as the country's senior minister, to fully support her and not allow us to be fobbed off with a pittance – one of the many consequences of which would be that younger people would be even less inclined to save for retirement.

Being realistic, I accept the financial difficulties facing us all and perhaps consideration could be given to compensation payments being made in stages, payable in say four or five years when the economy is on a sounder footing.

Whatever, Sir, please do not let us down; we have waited for justice long enough.

Yours sincerely,
Ian Ewence

Cc: Nick Clegg, Danny Alexander and Mark Hoban"

"This is my first post as the daughter of two with-profits annuitants. I occasionally read this board (Motley Fool) and totally agree with Ann Berry's excellent posts amongst others. I note the comments about dormant Equitable Life policyholders. Many, like my parents, are too old, frail and ill to fight on.

Both my parents in their mid 80s have Alzheimer's, one at home and one about to go into a care home. I have been looking after them and could not contemplate attending a protest anywhere until now. However, I have just got a live-in carer for my father and with my mother in a care home, finally can give more attention to the fight.

As you can imagine their depleted savings are going on care costs, a dwindling annual pension and loss of my earnings by baling out too early from a full time well paid job to look after them.

The Coalition at first looked like a promising change. However, they have done nothing yet to look at the cost of elder care being distributed more fairly. It is just 'same old, same old' as Nu Labour and Gordon trying to stitch up the Equitable victims with the appalling Chadwick report. Cameron, Clegg and Cable have not matched their pre-election words with actions. The saddest thing of all is to see my father slumped in his chair raising the Equitable debacle several times a day visibly upset on each occasion. It gnaws away at the very core of him with what limited ability he has to comprehend what goes on around him. The politicians and Treasury mandarins couldn't care less and are just trying to cobble together something which pays out the least they can get away with. My parents saved hard for their old age never expecting anything in return but decency and fairness. Instead, they have been thoroughly shafted at every turn!

When my father was still able to conduct a sensible conversation I drove him to our MP Damien Green at his surgery. People like me may not have contributed before on this board but we haven't necessarily been silent. The handling of the Equitable affair is an utter disgrace and I expect the Establishment are frightened of what else will be uncovered in the future with other institutions.

...I have already written many letters especially to Cameron as I hoped we would have a Conservative government rather than this Coalition. All I have ever received was the usual template rubbish letters from one of his researchers.

No wonder relatives of the Equitable's victims don't trust the pension or savings industry. Like the banks, corruption is rife at almost every level. So when next someone asks about the silent majority of Equitable victims, please consider that many cannot contribute effectively and so we as their offspring must take up the cudgels on their behalf!"

A new contributor, 'bestintentions', to the Motley Fool discussion board writes powerfully at post number 84019.

Equitable Life payout report 'is unsound'.

"A government-commissioned report that said victims of the Equitable Life scandal should receive compensation of just £266 each has been branded 'unsafe' and 'unsound' by the Parliamentary Ombudsman. The verdict yesterday by Ann Abraham has given fresh hope to the victims, who feared they would be left with a 'scandalously' low amount if the Coalition adopted the proposals.

Many of the victims of Equitable Life's near collapse lost most of their life savings. However, Sir John Chadwick's report, published last week, recommended that they receive just £400million compensation in total – about £266 per policyholder.

This was despite a report from a consultancy firm, published at the same time, which suggested losses sustained by policyholders were between £4billion and £4.8billion.

Ms Abraham wrote to all MPs yesterday saying the Chadwick report was an 'unsafe and unsound basis on which to proceed', and accused Sir John of 'explicitly rejecting' her help when deciding on the level of compensation that should be paid.

Equitable Life victims fear the Coalition will adopt the Chadwick Report despite assertions from the Treasury Minister Mark Hoban that the Conservatives would abide by Ms Abraham's own report in 2008, which found the Government guilty of maladministration and recommended a full compensation scheme.

Paul Braithwaite, head of the Equitable Members Action Group (EMAG), said the ombudsman's stance had 'vindicated EMAG's assertion that the Chadwick Report was a Treasury dirty trick to cheat Equitable Life policyholders'.

Ms Abraham said of the Chadwick Report: 'These proposals, if acted upon, would not in any sense enable fair and transparent compensation to be delivered.'

The Labour government agreed to set up a limited scheme that would compensate only those who had lost the most, and instructed Sir John to proceed on that basis. Mr Hoban said at the time that the Tories would accept the ombudsman's findings and pay out on that basis.

However, when he published the Chadwick Report last week, Mr Hoban said it would be an 'important building block' in deciding how much compensation victims would receive. He also indicated that the amount would be constrained by Britain's economic woes."

Daily Telegraph, by Rosie Murray-West - 27 July 2010

"Equitable Life victims warn of low pay-out.

Victims of the Equitable Life scandal will this month learn details of a long-awaited compensation package, but are warning that the coalition government will offer them only a fraction of what they are demanding.

Mark Hoban, Treasury minister, has promised to make an announcement in mid-July and has assured policyholders he will create a 'transparent, fair and independently designed' payment scheme.

But policyholders believe the eventual sum paid out will be about £1bn, far less than the £4bn-£5bn they have been demanding.

They had cheered the coalition agreement published in May because they believed it committed the new government to implement in full the 2008 recommendations of the parliamentary ombudsman, who calculated the multibillion pay-outs.

But now they are angry that Mr Hoban has kept faith with a review of their claims instigated by the last Labour government, under the chairmanship of Sir John Chadwick, a process they believe is discredited.

EMAG, the policyholders' action group, believes Sir John's terms of reference were over-complicated and were deliberately framed by Labour to minimise payments.

The group claims that continuing to rely on Sir John's work without any change to his terms of reference is likely to produce an actuarial fudge designed to understate the true scale of losses by as much as 80 per cent. 'His discredited terms of reference from the Labour government were heavily criticised by the parliamentary ombudsman who said that they would not deliver the justice she had called for,' said Paul Braithwaite, of EMAG.

'Instead of sidelining Sir John or updating his terms of reference to reflect their election promises, the coalition has allowed the process to continue with no change whatsoever. It looks as though, after 10 years of obstruction, the Treasury is still in control and determined to short-change victims.'

David Cameron has vowed to end the wait for compensation for policyholders. The prime minister has insisted the payments should not be means-tested and that descendants of deceased policyholders should be included.

Mr Hoban will announce this month that an independent commission will be set up to administer the pay-outs, which arise from the near collapse of the world's oldest insurer 10 years ago. A million people lost up to half of their life savings.

The government will publish Sir John's report – possibly next week – which will advise on issues such as relative loss suffered by policyholders and the impact of their losses.

Labour made little secret of its willingness to kick the Equitable case into the long grass."

Financial Times, George Parker 9th July, 2010

See this and other press coverage.

"Equitable Life group's last-ditch compensation bid.Equitable Life policyholders are making a last-ditch effort to win support from the coalition Government for an independent commission to award them compensation.

Equitable Members Action Group (EMAG), which claims support from 40,000 policyholders, is urging the Government to follow the recommendations of the parliamentary ombudsman (PO) for a commission, and to 'marginalise' the report of Sir John Chadwick due to be published next week.

Retired judge Chadwick was appointed by the last Government to adjudicate on making payments only to classes of policyholder who had been 'disproportionately affected', and was steered by the Treasury towards a complex discount mechanism which reduces the value of any payouts.

The Treasury had hinted that compensation would be limited to £1 billion rather than the £4.7bn implied by the PO's report.

Paul Braithwaite, general secretary of EMAG, said yesterday that 380 MPs had signed a pledge before the election to support 'proper compensation' from an independent scheme, while new Conservative Treasury minister Mark Hoban had said he was 'committed to implementing the Ombudsman's recommendations'.

Ann Abraham, the ombudsman, was highly critical of the last Government's response and its terms of reference for Chadwick.

Braithwaite has told EMAG members: 'The Treasury's intention, based on Sir John Chadwick's work, is likely to be a clever actuarial fudge which will seem to show that, even if Equitable Life had been properly regulated, compared with the worst performing pension life companies we have hardly lost much at all.'

He says it was 'outrageous' that Chadwick was allowed to proceed with unchanged terms of reference, which were 'entirely incompatible with the Po's recommendations and hence totally at odds with the coalition's promise and MPs' individual pledges'.

Braithwaite commented: 'Chadwick's report was conceived to both delay and to minimise payouts on what was essentially a charity hardship scheme, on the instructions of the Labour Government ... We want independent assessment of the losses that will form the basis of compensation, not just independent distribution of compensation.'

EMAG has been refused by the Treasury an explanation of the critical methodology used by actuaries Towers Watson to determine the relative performance of Equitable Life and other insurers in the 1990s."

The Herald, Simon Bain, 8 July, 2010

"Q: In the coalition agreement, the government said it would make fair and transparent payments to Equitable Life members. When is this likely to happen?

Steve Webb's answer:

I think the important thing to say about Equitable is the difference between the coalition's view on the ombudsman's report and the previous government's view is that the coalition accepts the thrust of what the ombudsman had to say.

I think the Ombudsman objected to the previous administration picking and choosing from her findings.

We said we accept the report, and now it's a question of looking at other spending commitments as well, what can be afforded for Equitable and then what is a fair way of allocating that pot. That’s the process that's going on now."

IFA Online, by Pensions Minister, Steve Webb MP, 1st July 2010

"The Government is committed to implementing the Ombudsman's recommendation to make fair and transparent payments to Equitable Life policyholders, through an independent payments scheme, for their relative loss as a consequence of regulatory failure.

We will be introducing a Bill in the first session of this parliament that will enable payments to be made and will be establishing an independent commission that will determine the design of the payments scheme. This is a sign of our commitment to deliver on the pledge we made in our Coalition Agreement."

Daily Telegraph, Mark Hoban (Financial Secretary to the Treasury) 26 June, 2010

"Play fair over Equitable. The new Government got off to a promising start with Equitable Life. Last month, it pledged to set up a 'transparent, fair and independently designed' compensation scheme for some of the 1.1 million policyholders who lost money when the mutual nearly collapsed in 2000. The statement appeared to reverse the previous government’s promise that only those 'disproportionately impacted' would receive anything. Hopes were stoked that up to £5 billion would be paid out in short order. An estimated 15 Equitable Life policyholders die every day, meaning that about 55,000 have gone to their graves without financial remedy since Equitable’s disaster.

The coalition promised to remove means-testing and allow descendants of deceased policyholders to claim.

But now the new Government appears to be back-peddling.

According to campaign groups such as EMAG, the main problem is the Treasury’s decision to wait for Sir John Chadwick, the retired judge who has been assessing customer losses at Equitable, to publish his final report next month before coming up with a final figure. To their fury, Sir John’s terms of reference, set up by the last government with the aim of paying only the most needy, have been left unchanged. EMAG fears this will cut compensation by as much as four fifths, to as little as £1 billion.

The Government must be fair on Equitable. It may be reasonable to argue that, with so little in the Treasury’s kitty, policyholders should take a haircut. Like the thousands in the public sector facing pay freezes and lost pension rights, Equitable’s customers should expect to share some pain. But a cut of 80 per cent is simply not fair. If Sir John really is working towards a £1 billion figure, he should rethink, or be ignored."

The Times, by David Wigton 18 June, 2010

"Equitable victims fear £4bn Treasury 'ambush'

Campaign fighting for victims of the Equitable Life scandal have rounded on the Coalition Government, warning that a "Treasury-inspired ambush" could cost policyholders almost £4bn.

The Equitable Members Action Group (EMAG), which represents policyholders who lost billions in the pension provider's near-collapse in 2000, said it believed the Government was planning a 'huge reduction' in the compensation offered to victims. The warning came after ministers failed to give reassurances over the calculations for the final amount due. EMAG claims the losses incurred by the victims reached £4.67bn. This was the figure published in Parliamentary Ombudsman Ann Abraham’s report into the scandal in 2008.

However, the group claims the Treasury could lower the payment to £1bn by 'rebranding' the cheaper ex-gratia scheme proposed by the last administration. The Coalition had agreed to uphold proposals originally outlined by the Ombudsman, recommending substantial compensation for more than a million policyholders.

'Given the Treasury’s continuing refusal to make public the calculations of [the actuary] and the many unrealistic assumptions they have been briefed to make, our suspicion is that what they are doing is nothing better than a work of fiction designed to come up with the number the Treasury intended in the first place,' said Paul Braithwaite, a spokesman for EMAG.

'We are deeply disturbed by the gulf between the expectations raised by the Government’s promise and what appears to be going on at the Treasury.'

In a letter to MPs, EMAG added that Equitable victims should 'not be first in line to shoulder the whole burden' of Government cuts.

'If health, education, civil service pensions, local government salaries are to be subject to cuts, then one might expect us to shoulder part of the burden by accepting the same percentage cut as other spending commitments – but robbing 80pc from the compensation due to one million Equitable Life victims would be an outrage.'

The Treasury did not comment."

The Daily Telegraph Jamie Dunkley 16 June ‘10

“Nervous wait for Equitable campaigners. EXPECTATIONS have been raised of a multi-billion pound payout to more than a million Equitable Life victims, after the new government promised a "fair and transparent" settlement for all.

Campaigners have been fighting for a decade for £4.8 billion compensation to cover what they claim they lost, when the UK's most trusted insurance company collapsed. Both the Conservatives and Lib Dems supported their activities when in opposition and, as one of their first moves in office, promised money would be forthcoming.

But after initial euphoria, investors are becoming increasingly nervous about what precisely the coalition has in mind, and at the lack of detail accompanying the government's statement.

Treasury secretary Mark Hoban has guaranteed that a new bill will be forthcoming, establishing a scheme of compensation. He also pledged that payments would not be means tested, and the thousands who have died since the scandal broke, will not be shortchanged. Their estates will be credited with any redress due.

These two issues were major points of contention with the last government, which had set up a commission under Sir John Chadwick with a specific and tightly worded remit.

Now, however, some campaigners are concerned that investors' hopes may have been raised prematurely, given the caveats in a letter from Hoban, in which he also stresses "the impact of any scheme on the public purse must be taken into account". More worryingly, although the government has pledged to set up an independent commission, which will determine the design of the payment scheme, there are concerns it may all but rubber stamp the findings of Chadwick, who was appointed by the previous government.

His brief, at that time, was to concentrate on those who had been "disproportionately impacted". In other words compensation would be paid according to need, not justice.

Donald Scott, an East Scotland representative of the Equitable Members' Action Group (EMAG), said: "I am concerned, because I am not sure where we are going from here. The Parliamentary Ombudsman said we should be compensated according to rules drawn up by an independent commission. Chadwick was commissioned by the Treasury, so we don't see him as being independent at all. We felt he was discredited."……

Scotsman, Teresa Hunter, 6 June, 2010

"Equitable Life victims need justice. The coalition government has moved decisively to help Equitable Life policyholders waiting for justice, says financial secretary to the Treasury Mark Hoban...

Yesterday, the coalition Government took a major step towards ending that injustice. We were proud to announce the introduction of a Bill that will finally enable payments to be made to policyholders. We have also made a firm pledge to compensate dependants of deceased policyholders and that payments will not be means tested.

These two factors show our commitment to a swift, simple, transparent and fair payment scheme. The policyholders have waited long enough for justice. This coalition is built on the principles of freedom, fairness and responsibility. We recognise the Government's responsibility to tackle this issue and to do so in a way which is fair to both policyholders and taxpayers.

Our independent commission will determine the design of the payment scheme. While we appreciate the need to implement a payment scheme quickly, the impact and implications of events in relation to Equitable Life are complex, and it is important our approach is thorough, transparent and fair.

We believe this will give policyholders the confidence that they have got the best possible deal. But, as the Ombudsman accepted, we also recognise that the impact of any scheme on the public purse must be taken into account.

This issue means a lot to me. I have been working on it since 2005 and since coming to office I have had meetings with Sir John Chadwick, who was appointed by the previous government to advise on compensation, as well as Equitable Members' Action Group and Equitable Life.

The fact that we have announced within two weeks of being in power that we will introduce a Bill proves how serious this Government is about helping policyholders.

We are very aware of the distress among policyholders who have suffered loss, and the strong desire to achieve a solution quickly. While there will be frustration at the short delay to Sir John's report, it is important our approach is thorough and fair.

The Government is working hard to address the situation as quickly as possible, in order to ensure the establishment of an independent payment scheme that is fair to both taxpayers and policyholders."

Mark Hoban MP, financial secretary to the Treasury Daily Mail 25 May 2010

"Coalition Government: Equitable Life victims to get compensation

All victims of the Equitable Life scandal will now be handed compensation for the losses they suffered in a move campaigners hope will bring an end to a decade of 'denial and obstruction'.

The new coalition Government has agreed to uphold proposals originally outlined in a report into the insurer’s near-collapse in 2000 by Parliamentary Ombudsman Ann Abraham in 2008.

The report recommended substantial compensation for more than a million policyholders who lost pension savings when the company was forced to close to new business.

At the time, Ms Abraham’s damning report into Equitable Life found the Labour Government guilty of maladministration on 10 occasions but the Government said it would only offer limited compensation to victims.

However, in a statement yesterday, the new coalition Government said it would agree to implement the Ombudsman’s recommendation to make 'fair and transparent payments to Equitable Life policyholders, through an independent payment scheme'.

This upheld manifesto pledges made by both the Conservatives and Liberal Democrats.

The news was welcomed by campaigners who have lobbied for full compensation for victims.

Speaking yesterday, the Equitable Members Action Group, which represents 21,000 policyholders, said: 'We welcome the new Government’s commitment to implement the Ombudsman’s report in full. It’s been a long time coming.

'Sadly many thousands of Equitable pensioners have died without justice, sacrificed on the altar of Gordon Brown’s defence of 'light touch' regulation.'

The group said it will now work with the Government to help to ensure a 'swift' start to the process.

It added that it would also explore the possibility of policyholders receiving interim payments."

Daily Telegraph 13 May 2010

Other press:

"More Equitable deal on offer for pensioners at the polls. If the polls are right and Gordon Brown leaves Downing Street, one million savers who trusted Britain’s oldest insurer can expect justice at last in the sorry saga of Equitable Life...

The pre-election pledges have been won by an eight-year campaign by the Equitable Members Action Group (EMAG), which has 23,000 members and an array of professional support. Along the way, EMAG has twice humiliated the government in the High Court, and won the support of the European Parliament, the Labour-led Public Administration Committee, a 150-strong standing group of MPs, and the parliamentary ombudsman Ann Abraham. But justice delayed is justice denied...,

When in 2008 Ms Abraham produced her blockbusting 2,800-page report, she found the government guilty of maladministration and injustice, and urged the immediate creation of an independent compensation tribunal which could complete pay-outs to one million policyholders by the end of 2010.

The government sat on the report for five months before publishing it, then waited another six before responding. Finally Treasury Secretary Yvette Cooper went to the Commons in January 2009.

...the minister had rejected the ombudsman’s key findings, as she appointed retired judge Sir John Chadwick to work under Treasury supervision on a low-budget scheme, which would make limited ex-gratia payouts to people who had suffered 'disproportionately'. EMAG estimated it might reach 10% of policyholders.

The Labour-led Public Administration Committee called the response 'shabby and unconstitutional'. More than 300 MPs signed an early day motion by Vince Cable calling for Mr Chadwick to resign. EMAG went back to the High Court, dug deep into its pockets again, and won a ruling forcing Mr Chadwick to widen his remit.

Last month, EMAG withdrew in frustration from the entire Chadwick process.

Mr Braithwaite says:

'It’s a Treasury stitch-up which seeks to negate four years of genuinely independent work by the parliamentary ombudsman... The government has treated us with contempt and brushed us aside time and time again. It is quite heartening that Lord Penrose, then the ombudsman, and now the court, have basically substantiated that these people have suffered an injustice and should be compensated.'

Read the extensive article detailing the time line in The Herald, Simon Bain 2 May 2010

"Equitable Life losses cost hero his home.

RAF veteran Mark Mead was shot down by the Nazis and held as a PoW. Now aged 90, he is having to leave his beloved bungalow after losing his savings in Equitable Life...

...a month before his 90th birthday, Mark, and his wife Cynthia, are having to sell their beloved bungalow and move to a smaller property after seeing their retirement income plummet.

They are among tens of thousands of older people whose finances have suffered a severe blow after being caught up in the Equitable Life scandal – and who, with the government accused of dragging its heels on compensation, have not yet received a penny...

Over several years, Mark and Cynthia took out a number of Equitable Life products, including two with-profits annuities, which pay an income in retirement. With-profits annuity holders are regarded as the Equitable scandal's biggest losers. These policies were eventually transferred to Prudential, but the way they work means many people have seen their pensions cut by more than half, with the prospect of further falls...

...the family says that this year another Equitable Life investment providing them with an income of £2,000 a year in effect dried up. This appears to correspond to a pair of Equitable bonds which the company says were taken out 20 years ago, and are now worth £1,380. It was this that led the couple to conclude they would have to downsize.

Mark only has a state pension (he relates in his memoirs how, at the firm where he worked for many years, he 'saw several pension schemes initiated which then faltered, so I decided to make my own provision for retirement, and this I was able to do, on a modest scale, but without any contribution from the company')...

...having never claimed anything from the state, they are now getting pension credit and attendance allowance. Cynthia says she was reluctant because of the stigma in claiming benefits. Their council tax has also been reduced.

'It's unbelievable it should end like this,' says Cynthia, adding she feels sad because it's only in the last few years they have had to worry about money. She believes they, and many others, were victims of the 'mismanagement' of Equitable but, aside from that, says: 'I don't blame anyone particularly.' Asked how he feels about it all, Mark says: 'Thoroughly depressed.'..."

Read the whole sorry story at:

The Guardian, Rupert Jones, 17 April, 2010

"Watford MP Claire Ward has been accused of 'betraying' the thousands of constituents fighting for compensation after losing their pension funds.

Ms Ward agreed last month to sign up to an all party group of MPs supporting former investors in Equitable Life, many of whom saw their retirement plans ruined when the company came close to collapse in 2000.

However, angry campaigners have now accused her of reneging on her earlier promises and ''deceiving'' the estimated 9,000 victims in her constituency.

Stuart Pole, chairman of Equitable Members Action Group (EMAG) in Hertfordshire and Middlesex, said the Labour MP reneged on the pledge at the end of March, when she voted against House of Commons motion that, its Conservative and Liberal Democrat backers claimed, would have brought full compensation a step closer.

Mr Pole, of Radlett, said: 'We deeply regret Ms Ward's behaviour in this matter also now includes deceiving Watford constituents by undertaking to support them and then betraying them.'

Mr Pole also expressed frustration at Ms Ward’s lack of cooperation with the group on individual cases. Liberal Democrat parliamentary candidate Sal Brinton, whose party supports full compensation, added: 'This motion would have been a major step forward. I am disappointed and outraged at her failure to support 9,000 constituents.'

A spokesman for Ms Ward, however, dismissed the claims as 'absolutely ridiculous and wrong,'...

Ministers, however, have only proposed ex gratia payments to those 'disproportionately affected' – a process that avoids the acceptance of blame and raises, EMAG claims, the possibility of means testing.

Labour’s chief secretary to the Treasury Liam Byrne, however, said in February that such a course of action was 'neither desirable nor administratively feasible'.

EMAG is demanding full compensation."

Watford Observer, Neil Skinner, 16 April 2010

Two triumphs for EMAG:

"We will make pensions and benefits fair and reward savers by: Meeting the government’s obligations towards Equitable Life policyholders who have suffered loss. We will set up a swift, simple, transparent and fair payment scheme."

Page 18 of the LibDem manifesto

"We must not let the mis-selling of financial products put people off saving. We will implement the Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policyholders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure."

Page 12 of the Conservative manifesto

"Fresh political battle looms over Equitable policyholders: Equitable Life policyholders believe a review into compensation due to be published shortly by retired judge Sir John Chadwick will be a whitewash following pressure from the government to delay and scale back their claims. The company's new management, led by chief executive Chris Wiscarson, is also understood to be 'deeply troubled' by the direction taken by the Treasury-commissioned review.

But the decade-long Equitable Life scandal is threatening to embarrass both leading political parties in the run-up to the election. The Conservatives have attempted to take the high ground by promising an independent body to determine compensation, but have floated a sum of £1bn instead of the £4-5bn estimated by the Equitable Members Action Group (EMAG).

Paul Weir, an EMAG spokesman, said Chadwick's third interim report was 'a cynical stitch-up designed by his Treasury masters.' The final version is due in May. He added that he welcomed the Conservative pledge to move quickly on redress but said: "'If the Tories undershoot on the amount it will backfire and fester on for years." Policyholder Les Crouch from Cardiff added: 'Good news, but a 25% payout? We must keep the pressure on.'

Vince Cable, the Lib Dem Treasury spokesman, has written to EMAG saying that the government's approach to compensation is 'flawed'...

Any payments to Equitable victims will be controversial at a time when the credit crunch has stretched the public purse. But Weir says: 'It is not our fault that there was profligacy by the banks. All we want is our own money back.'"

The Observer, Ruth Sunderland, 4 April 2010

“Following your meeting with Oliver Letwin and me, I can confirm that we support the EMAG pledge and we will encourage Conservative candidates to sign it.

Since the Ombudsman published her report in July 2008, we have made it clear that we accepted her recommendation that compensation should be paid as a consequence of maladministration.

We support her recommendation that this should be based on the relative loss suffered by policyholders and we believe that this should ensure that the payment scheme is simple, transparent and fair.

We also support the Ombudsman's view that it is appropriate to consider the impact of any scheme on the public purse. This will need to be borne in mind when we set the terms of reference of an independent scheme to implement her recommendations.

The design of this scheme will be determined independently of government with two exceptions:

There should be no means testing; and
Payments should be made to the dependants of deceased policyholders.

We would welcome EMAG's co-operation with the independent process to design and implement the compensation scheme.

It is time for the Equitable Life's policyholders to receive the justice they deserve. As David Cameron said recently, “If we win the election, we‘re going to sort out Equitable Life very early on”. We believe by endorsing EMAG's pledge and setting out this process we will deliver on that commitment.”

A letter, dated 2 April 2010, from Mark Hoban MP, Conservative Shadow Financial Secretary to the Treasury, to Paul Braithwaite and EMAG.

"Equitable Life reports increased policy values.

Equitable Life has predicted a 'real positive momentum' in the year ahead as it revealed an increase in assets for policyholders. In its preliminary results for the year ended 31 December 2009...

Ian Brimecome, chairman of Equitable Life, said despite a challenging 2009 the society had benefited from the completion of the contract with HCL to provide administration services from March next year which had added millions of pounds of value to policyholder funds...

Chris Wiscarson, chief executive of Equitable Life, said the society would continue to focus on maximising the return on policyholder assets subject to meeting solvency requirements; providing the best value for money cost base; and achieving maximum government compensation for policyholders.

He said: 'It is our intention to distribute all of the assets amongst with-profits policyholders as fairly as possible over time.'

Mr Wiscarson congratulated the Equitable Members Action Group (EMAG) on its success in getting the government to change the terms of reference of Sir John Chadwick's compensation proposals so that his advice on a compensation scheme will be more comprehensive than it might otherwise have been..."

FTAdviser, by: Catherine Couch 1 April, 2010

"Tuesday evening saw yet another debate on Equitable Life in the House of Commons. Despite several Labour MPs making speeches very hostile to the Government, with Barry Gardiner (Brent North) being the most forceful and eloquent, the Government motion was passed by 291 votes to 236 votes. Those are the hard facts and anyone who has followed the Equitable Life saga since the mid-1990s will be inclined to let out a sigh of despair and conclude that nothing much has changed and that the 1.5 million policyholders - average age now 79 - are still no nearer knowing what compensation, if any, they will receive. That would be an unduly pessimistic view….. What the opposition team led by shadow Treasury spokesman Mark Hoban said was that they would hope that, if the Chadwick review is genuinely independent, it will come up with some proposals that are nearer to the original Ombudsman's report than so far supported by the Government.

Of course, there are severe doubts among policyholders that Chadwick is anything other than a Treasury stooge working to a brief to come up with the most limited, cheapest scheme he feels he can get away with. This view was forcefully articulated by the Equitable Members' Action Group in the wake of the publication of Sir John's third report a couple of weeks ago...

There was a concerted push by the Liberal Democrats to extract a commitment to make interim payments to policyholders but this didn't win enthusiastic support from the Tories and was ruled out by the Government.

The conclusion I have come to on reading through the debate in Hansard a few times is that there is now very little difference in the position of Labour and Conservative front benches, although the Tories hint at a more generous settlement should Chadwick fall short of their hope that he will recommend a scheme similar to that envisaged by the Ombudsman last year. Attempts by Government ministers to get the Tories to be specific on this commitment forced Mark Hoban onto the defensive with the plea
'We do not know what the bill will be'.

He almost sounded for a moment as he was practicing for when he might be a minister himself. One thing I have learnt to refrain from referring to any twist or turn in this sorry tale as the 'final chapter' again."

David Worsfold, IFA Online 18 March 2010

EMAG had concerns about the debate with regard to 'The Chadwick Process' and wrote a letter to EVERY MP immediately.

"The action group representing Equitable Life policyholders accused the Treasury of a 'stitch-up' last night.

Equitable Members’ Action Group (EMAG), which represents 25,000 policyholders, some of whom lost their life savings during the society’s near-collapse a decade ago, has withdrawn its support for a Treasury-commissioned review into compensation payments. Instead of co-operating with Sir John Chadwick, who was commissioned in January last year to explore payments for policyholders 'disproportionately' hit by Equitable’s financial troubles, the group said that it would campaign for a full compensation fund to be established...

Paul Braithwaite, general secretary of the Equitable Members’ Action Group, told The Times last night that Sir John’s review, the conclusions of which are due in May, was a Treasury 'sham' that was being controlled by civil servants. Mr Braithwaite said that the Treasury was using the review to 'retry the case' of Equitable and attempt to deny any obligations to make good policyholders’ losses.

Rather than the billions that they were due, policyholders were likely to end up with 'only several hundred millions', he said. The action group’s campaign will focus on existing and prospective MPs, many of whom have numerous constituents who hold worthless Equitable policies, he said.

The Treasury said it regretted the group’s decision and that it had taken account of its submissions. A spokesman said it was commited to a 'fair resolution for policyholders."

The Times, by Miles Costello 16 March 2010

See EMAG’s press release

"Savers warned about high price of leaving Equitable Life. People who transfer pensions out of the beleaguered insurer Equitable Life don't know the true cost of doing so, a whistle-blower claims... But Britain's oldest insurance company – which was forced to stop selling new policies 10 years ago when the House of Lords ruled against it – says it treats all its customers fairly...

...a source close to the company claims that people younger than 60 – the minimum age at which Equitable allows pension plan-holders to take benefits without any exit penalty – are not told the full difference between what they can obtain as a transfer value and the maturity value they would receive if they waited until they were 60...

'So, people who have asked for transfer values since then are told about a 5pc market value adjustment (MVA) but not about the 16pc reduction..

Equitable Life spokesman Alistair Dunbar said: 'It is the words that are the problem here – not the meaning. The difference between the surrender value and the contractual value is something that we are completely open about. I am not saying that the person who has made these allegations is not genuine...

'The problem affects clients who are not old enough to achieve the full value of their policy. For example, if you call Equitable Life for a value of your policy and have not reached the minimum contractual age, you will only be given a 'transfer value' and not a full maturity value. The official reasoning is that any activity on the policy – for example, moving to another provider – is breaking the contract and therefore the full maturity value is not applicable and not given...

Paul Braithwaite of the Equitable Members' Action Group added: 'These appear to be very serious revelations which we hope and expect the new chief executive of Equitable Life, Chris Wiscarson, will investigate thoroughly.'

A spokesman for the Financial Services Authority said it could not comment on its supervisory role in relation to any individual company, but it is determined to ensure that all regulated firms treat their customers fairly."

Saturday Telegraph, Ian Cowie 6 March, 2010

"Honor Blackman battling for the Equitable pensioners

Liam Byrne had better watch out. The 'forces of hell', which his Darling boss at the Treasury had to contend with, may seem like summer breezes compared to the Fury sitting opposite me in a Notting Hill café, plotting revenge. 'It would be quite something to hit the Treasury minister about,' says his nemesis, waving scarlet finger-nails and flashing a singularly steely pair of ice blue eyes...

Blackman is 'mad as hell' about the decade of government prevarication regarding a settlement for the thousands who have been left all but destitute in their last years. 'It sounds like we are asking for charity,' she fumes, 'when we were deliberately defrauded by being sold policies which Equitable knew they couldn't honour.' Why else would she make the supreme sacrifice of being photographed holding onto a giant cardboard cheque for £5,000 addressed to a notional Equitable Life sufferer? ...

Blackman is the most prominent, and glamorous, of the 44,000 Equitable Life annuitants – average age 79 – who have yet to receive any compensation for the mismanagement of their funds. It is 10 years now since the insurer slashed payments, having run deep into debt by promising more than it could deliver...

'These are people the Government should think are wonderful,' she says. 'We were responsible, prudent, we provided for our retirement so that we wouldn't be a burden on the state or our families. These people are having to sell their houses and live on benefits. But they ignore us. Yet if you gambled with your money, and put it in Iceland, you were promptly reimbursed.'

This Wednesday she attended a meeting at the House of Commons, along with 93 MPs, including the Lib Dem Vince Cable, a long-time critic of the Government's 'shameful' handling of Equitable. There Byrne and Chadwick promised action within two weeks of the latest report being published in May – just when a general election is expected.

'I think they hope they won't have to deal with this. But someone will bring justice...

One reason why Equitable Life pensioners may have been left to rot is the misconception that they are rich people who can afford to take the knock. But, she points out, the typical value of their annunity pots is £47,000 from which individual pensioners have been receiving only £2,200 a year, half what they were promised...

She seems to be relishing the action and attention so much that I wonder whether other Avengers will also turn vengeful. Perhaps Diana Rigg will battle for the angry patients of Stafford hospital? 'I doubt it. Diana has distanced herself from the Avengers. But I am happy to man the guns for EMAG, any time'."

Daily Telegraph, by Cassandra Jardine 26 Feb

"Equitable Life savers get callous treatment

The Government seems determined to leave the Equitable Life debacle to be cleared up by its successor. The Government’s regulatory incompetence in the Equitable Life debacle has now given way to callous cynicism, It is 19 months since Ann Abraham, the Parliamentary Ombudsman, identified 10 instances of maladministration between 1991 and 2001 ...

Why the tardiness? Could it have anything to do with the fact that the claimants whose need is the most pressing – those on devalued annuities – have an average age of 79? As David Cameron has pointed out, the Government is simply waiting for them to die...

Mr Cameron has described this strategy as 'sick', and he is right. Miss Cooper and her successor, Liam Byrne, have behaved shamefully. Last October, Mr Byrne was asked in the Commons when payments would start. His reply? 'That, I know, is the million-dollar question, which I cannot answer this afternoon.' It is worth contrasting this with the compensation awarded to miners a decade ago for illnesses incurred in the pits, when 90,000 claims worth more than £4 billion were settled in short order. But then, the victims of the Equitable Life collapse are not natural Labour supporters.

At a protest meeting yesterday, the actress Honor Blackman, an indefatigable campaigner on the issue, called for interim payments to be made to the 44,000 most elderly victims, ahead of Sir John’s full report. If the Government had any sense of decency, it would accept the proposal – though we fear it is determined to leave the mess to be cleared up by its successor."

Leader Column in the Daily Telegraph, 19 Feb

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