MP questions whether FSA withdrew pensions from Equitable Life
Liberal Democrat MP for Eastbourne Stephen Lloyd has questioned whether the FSA withdrew its pensions from Equitable Life when it became aware of the problems within the firm.
Lloyd told Parliament yesterday during a debate about compensation for Equitable Life investors that a representative of the Equitable Members Action Group informed him that the FSA had prior warning of the state of Equitable and withdrew its investment.
He said: “I had a meeting with EMAG yesterday, and one of its representatives told me that - I cannot vouch for whether this is absolutely true - that because the regulators apparently knew a good few years before the company hit the buffers that its financial model was in such a poor state, withdrew their pensions from the Equitable Life package.
“If that is true, it is absolutely disgraceful. It demonstrates what an atrocious job they did and emphasises that there is a very strong moral case for the payment of fair and appropriate compensation, irrespective of the financial challenges we face.”
The Parliamentary Ombudsman’s enquiry into Equitable Life recommended compensation be paid to investors due to Government maladministration. The compensation suggested was between £4bn and £4.8bn.
The independent report by Sir John Chadwick has recently recommended that compensation of as little as £400m be paid.
A spokesman says: “The FSA has never engaged Equitable Life to provide pensions to new employees. The FSA’s self-administered occupational pension scheme is managed by a separate trustee company that is responsible for managing the assets of the scheme and appointing the investment managers.”
Money Marketing understands that there may have been an Additional Voluntary Contribution scheme available to FSA staff who joined from previous regulators.