Equitable Life Frequently Asked Questions
For members with unit-linked or building
society investments
Q. How do I find out how much my Equitable Life fund is
worth?
A. A. Your most recent statement will tell you the fund
value at 30 April 2004. If you would like a more up to date valuation, you
will need to contact your Civil Service pension administrator (APAC). To
find out who your APAC is, visit our helpline
pages.
Q. Your deadline of 26 November doesn’t give me time to get
independent financial advice. Can I have an extension?
A. Taking into account the time for postage, members
should have at least 4 clear weeks to take advice. We feel that this is
enough time for you to make a decision. If you miss the deadline you can
still transfer your AVCs by contacting your Civil Service APAC in the usual
way.
Q. Should I move my funds?
A. Under the Financial Services and Markets Act 2000 we
cannot tell you what to do with your Equitable Life AVCs. Please read our
letter and the update to the Scheme Managers from Hewitt Associates
Financial Services Limited (Hewitt) carefully. It is important to be aware
that a particular course of action for one person might not be right for
another. If you still do not know what is best for your circumstances, you
should consider seeking Independent Financial Advice. If you do not have a
financial adviser but would like to find one, the following organisations
can help:
Association of Independent Financial Advisers (020 7628 1287)
-
IFA Promotions (0117 971 1177) can give you a list of three independent
financial adviser local to your area
-
If you belong to a trade union they may offer financial advice to their
members
You may have to pay a fee to an IFA, if you use his or her services.
Q. Will my employer (or the Cabinet Office) pay for my independent
financial advice?
A. The Cabinet Office has already commissioned Hewitt for
an update on the current situation and will not pay for independent
financial advice.
Q. Is my money going to be any safer with Scottish Widows or
Standard Life?
A. As managers of the CSAVC Scheme, the Cabinet Office
monitors all providers to ensure their ongoing suitability. As with any
choice of investments no one can predict which will offer the better
return. When comparing any investments in Equitable Life with another AVC
choice, it is necessary to decide which investment is most suitable for an
individual’s needs. If you are not happy with the choice of CSAVC Scheme
providers you can transfer to a Free Standing AVC (FSAVC). However, please
be aware that the charges imposed by the CSAVC Scheme providers are likely
to be less than those imposed by an FSAVC provider.
Q. Can I just cash in my CSAVC?
A. No, the purpose of making AVCs is to ‘top-up’ your
pension. The rules of the CSAVC Scheme have to comply with HM Revenue and
Customs regulations. These require you to use your fund to buy an annuity –
a pension for life –, which is on top of your Civil Service pension. You
are also able to take up to 25% of your AVC fund as a lump sum.
Q. Why do I have to wait until November for my transfer to be
processed?
A. You don’t have to wait. We are processing the transfers
in batches, so the earlier you get your response to us, the earlier your
transfer is likely to be processed. The first batch will go to Equitable
Life on the 29 October 2004.
Q. If I arrange my transfer separately, will I still get the same
terms from Scottish Widows and Standard Life as set out in the Hewitt
update?
A. Yes these special terms have been negotiated with the
providers for all those investing in a CSAVC. Standard Life’s enhanced
transfer terms are the same whether members transfer to Standard Life
individually or part of a group exercise. Scottish Widows are offering
their normal transfer terms, which will apply whether members transfer
individually or as part of a group exercise.
Q. Am I going to lose money by transferring my fund?
A. Equitable Life will pay an amount to your new provider
based on the value of units you hold at the date of transfer. There may be
a small cost involved in the transfer of units, which will be reflected in
the price of the units sold. These costs are incurred whenever you choose
to buy and sell your units. There is no additional charge imposed by
Equitable Life (or by the receiving provider) for transferring your
unit-linked or building society investments. Any transfer of funds will be
processed as quickly as possible but, as it takes time for Equitable Life
to pass the money to another provider, you should be aware that your AVCs
may not be invested for a short period of time during the transfer.
Q. Why didn’t I hear about this sooner?
A. We have had to consider Hewitt’s update and put
processes in place for the bulk transfer of Equitable Life unit linked and
building society funds.
Q. I am contributing to Equitable Life for additional life
assurance cover – how is this affected?
A. Life assurance cover is unaffected by our recent
update. Equitable Life continues to provide additional life assurance cover
for Civil Servants.
Q. Are you going to replace Equitable Life as a CSAVC Scheme
provider?
A. No. Unlike many other occupational AVC schemes, the
CSAVC Scheme already offers a choice of provider, Standard Life or Scottish
Widows. You also have the choice of purchasing ‘added years’ in the PCSPS.
PCSPS members can also ‘top up’ their pension through the designated
stakeholder pension provided by Standard Life.
Contact your APAC for further information on top-up options.
Q. Does any of this affect my Civil Service pension?
A. No. Your Civil Service pension is separate from your
AVCs. Only the contributions you have made to Equitable Life (to supplement
your main Civil Service pension) are impacted by the events at Equitable
Life, and the recent update in our letter.
Q. I don’t know how to complete the form you’ve sent to me – can
you help?
A. Yes. If you email us on
avcs@cabinet-office.x.gsi.gov.uk explaining which part of the form you
are having trouble with, we will contact you to help you out.
Q. Can you help me complete my Scottish Widows/Standard Life
form?
A. The providers can help you with this. Please contact
them by telephoning:
Q. What about former civil servants who have used their CSAVC funds
to buy pensions with Equitable Life?
A. This exercise does not affect former civil servants who
have used their CSAVC funds to buy annuities with Equitable Life.
Q. If I transfer out of Equitable Life and policy holders are later
awarded compensation will I lose out?
A. We do not know what the outcome of the Parliamentary
Ombudsman review (or any other action in relation to potential compensation
will be) but will keep members informed of developments. To date,
unit-linked and building society members have not had their returns reduced
as a result of the events affecting the With-Profits Fund and it is
difficult to see what compensation may be payable.
Q. The mapping on page of the Hewitt update refers to three
Scottish Widows Funds that I cannot find on any of the information supplied
by Scottish Widows. I would like to invest in one or more of these funds
what should I do?
A. The Scottish Widows Consensus Fund, The Scottish Widows
UK All Share Tracker Fund and the Scottish Widows International Equity
Tracker Fund are not mentioned in the Scottish Widows literature but are
available for this exercise. You can find out more about these three funds
on the
Scottish Widows additional funds page. If you wish to invest in any of
these three funds please amend the Scottish Widows Change of Civil Service
AVC Investment Fund Provider Form remembering to put the percentage you
wish to invest next to the name of the fund.
Q. I have already retired but have not yet taken my annuity, can I
still transfer my benefits?
A. The option to transfer is still available to those who
have already retired. In order to take full account of your personal
circumstances, it is recommended that you seek independent financial advice
before making a decision.
Q. As I have retired/already left the Civil Service, who do I put
as my Employer?
A. Please put the name of the last Civil Service employer
you worked for.
Q. If I leave my fund with Equitable Life and it becomes insolvent,
what will happen to my money?
A. The Financial Services Compensation Scheme (FSCS) would
take effect. The FSCS is part of the Financial Services and Markets Act
2000 and its provisions are that policyholders receive 100% of the first
£2000 of a claim and 90% of the excess over £2000.
Q. I am in the Building Society fund with Equitable Life, do the
other CSAVC providers have building society funds as I do not seem to be
able to find them on the list of funds available.
A. Standard Life does not have a building society fund.
Scottish Widows do have a building society fund but this is being wound
down and the cash fund is replacing it. If you would like to invest your
money in the SWBS fund then please contact Scottish Widows for more
information and you may the name of the fund on the SW Application form.
Q. I didn’t realise I had any money in a unit linked fund as all my
investments were in With-Profits and I transferred these out to another
CSAVC provider 2 years ago as part of the bulk transfer exercise. What has
happened?
A. Before the bulk transfer took place, all with profit
contributions were diverted into a unit linked fund in Equitable Life,
unless the member specifically advised their pension scheme administrator
that they wished to continue contributing to the With profits fund. When
the bulk transfer took place, contributions paid to the unit linked fund
remained with EL. You should have received a benefit statement from EL
earlier this year and this will tell you the value of your unit linked fund
as at 31 March 2004.
