Equitable Outcome for Debt-Ridden Pension Holders
By Patrick Omari
Equitable Life promised money that it couldn't afford, building a house of cards that would capitulate in 2000. Throughout the 1990s, the life insurance company promised so much and would eventually deliver so little when the company's assets were valued at 3 billion pounds less than the customers' policies.
Ann Abraham, Parliamentary Ombudsman for the Equitable Life debacle has declared that the government should admit negligence for their part. The government is accused of not monitoring the 'dubious practices' that have subsequently been discovered, including naming future profits as viable assets.
Ms Abraham stated clear intentions in her report that the government should refund those that were affected by what she labels as 'injustice' and 'maladministration'. She suggests that the policy-holders should be offered compensation to reposition them into the position in which they were before the Equitable Life collapse.
Since the near collapse of Equitable Life in 2000, the executives of the company were replaced by a new group. New chairman Vanni Treves agreed with the Ombudsman's report and welcomed the recommendation of a goverment compensation fund, saying 'The government should now pay up.'
After eight years of a seeming lack of responsibility, the government will be called upon to admit a level of liability. As Equitable Life continued to overvalue its own assets, the Government Actuary's Department and the Department of Trade and Industry were wholly inefficient in doing their job.
These two departments ignored such malpractices as Roy Ranson becoming chief executive and appointed actuary of Equitable Life, allowing him almost complete control of a 30 billion pound pension fund. Equitable Life have repaid the policy holders that were laden with a debt, admitting responsibility for their failings.
The Penrose Report of 2004 investigating the claims of the affected policy-holders directed much criticism to the Treasury and the Department of Trade and Industry. This leads us to question why it is four years later and the government is still being pressured into admitting responsibility.
Following the publication of the Parliamentary Ombudsman's report, the Treasury is expected to 'provide a full response to the House in the autumn.' As campaigners await the official response, it is expected that the government will be unable to deflect this obvious indictment and condemnation. Or so it would seem.
To the unaffected neutral, it would appear that a complete lack of regulation, combined with Ranson's autocratic running of the pension company led to its inevitable demise. Equitable Life have paid up so now we must wait for the government to put their hands in their very deep pockets and justice will be served.
About the author
Patrick is an expert Research and Travel consultant. His current interest include Heathrow Parking, the Hilton Heathrow and airport parking. from http://www.FreeArticlesAndContent.com
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