Mergers & Transfers

17 September 2019

Along with the many fund mergers that we have been experiencing over the course of 2019 (we anticipate more, or the expansion of fund manager mandates), we are now reaching the autumn when two significant providers of pension and investment plans/assets expect to make changes to their historic arrangements. These are the planned changes for Equitable Life and Legal & General. The headline details are as follows:

Planned transfers (subject to approval)

Plan Provider

Planned transfer to

Expected date

Subject to?

Equitable Life

Utmost Life Limited

January 2020

Member Approval (Vote 01 November 2019) & High Court Approval

Legal & General (L&G)

Traditional insurance-based savings, pensions, life and with profits business

ReAssure Limited

04 November 2019

UK Court Approval

Neither transfer is guaranteed at this point, but many investors and stakeholders have received their packs on the planned changes and the options that they need to consider.

We have made a few notes below on each of these potential transfers.

Equitable Life to Utmost Life

The recent documentation we have seen details the Proposal from Equitable Life. More can be found here: https://www.equitable.co.uk/ProposalAug2019/index.html

Chapters Financial is not responsible for the content of external webpages.

We believe the uplift in values being offered is only applicable to With-Profit fund holders. Some of the documentation indicates an estimated uplift of 71% (indicative and not guaranteed). However, in comparison to the non-guaranteed policy value and 35% capital distribution amount, the 'real' uplift might be closer to 18-19% (not guaranteed and may vary dependent on individual contracts).

If the Proposal is successful, plan holders will move to unit-linked funds and there are some choices to consider for this option.

If you would like to consider your plan in more detail and the advice costs that may be involved, which may be in part met by Equitable Life, then please let us know.

Legal & General (L&G) to ReAssure

Subject to UK Court Approval, the planned transfer of assets to ReAssure will occur on 04 November. This has been planned for some time, although the first client mailers over the summer seem to be generic and we anticipate further, more specific letters in the near future, including the fund choices that will be offered. More detail can be found here: https://www.legalandgeneral.com/policytransfer/

L&G has noted that there is no change to the value of the planned transfer of client assets to ReAssure. For simple plans, the planned transfer may be a reasonable change. For more complicated plans with specific asset allocations, we will look at the detail to provide our clients with suitable recommendations.

Summary

Some of the mailings we have seen leave reasonable client questions unanswered at the time of writing this blog, and I am sure will become clearer as we move closer to the respective proposed changes. Please contact us if you would like to know more about your plan if it is affected by these changes and what can be achieved.

October 2019 Update / Legal & General (L&G) to ReAssure
ReAssure and Legal & General have jointly agreed to defer the transfer, which was scheduled for 4 November 2019 (subject to High Court approval). More can be found here: https://www.reassure.co.uk/article/proposed-transfer-of-business-from-legal-general-to-reassure/
November 2019 Update / Equitable Life
The Equitable Life website has been updated to note that Scheme Policyholders voted in favour of the Scheme at the Policyholders' Meeting and Eligible Members voted for the Change to the Articles at the EGM.
More detail on this update and the next steps can be found here: https://www.equitable.co.uk/ProposalAug2019/index.html

No individual advice is provided during the course of this blog.

Keith Churchouse FPFS

Director

CFP Chartered FCSI

Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.