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Pension offices shun WP stakes

At least three major pension players will not be offering with-profits under stakeholder because DSS proposals allowing the inclusion are deemed not practical.

Scottish Equitable says it believes some of the Depart ment of Social Secu rity&#39s rules, which include an acc ounting ringfence, need to be ratified by the FSA under the Prudential Supervision of Business of Insurance Companies and Friendly Societies Act.

Negotiations between the ABI and the DSS on how with-profits is to be included in stakeholder have not satisfied ScotEq, Legal & General or Scottish Life.

L&G says its actuaries are “99.9 per cent” sure it will not be practically possible to offer with-profits within stake holder under the current rules.

Scottish Life head of communications Alasdair Buch anan says: “We will not be offering with-profits initially because we have seen no legislation which leaves us confident that it is credible or practical within stakeholder.”

The ABI says it is aware of concern but not of the widespread discontent with the DSS rules. The DSS says it had asked the industry for input and is willing to listen to any further suggestions.

But the ABI believes the existing rules are the best the industry can expect.

FSA spokesman Andy Fleming says: “All with-profits products are regulated by the FSA and we will be monitoring with-profits within stake holder. Our door is open if there are specific issues which life offices may have.”

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