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R&SA spends £464m to keep WP fund afloat

Royal & Sun Alliance ploughed a total of £464m into its £10bn Sun Alliance & London closed with-profits fund last year in a bid to keep it solvent.

The fund, which has more than £1bn put aside for guaranteed annuity liabilities, was handed £224m in what R&SA describes as a “notional adjustment” of shareholders&#39 funds between its life and non-life businesses.

The fund was also given a contingent loan of £240m by R&SA in the fourth quarter of 2001 after stockmarket falls caused it to require further support. Neither the capital adjustment nor the loan were declared in R&SA&#39s annual results last month.

Communications director Malcolm Gilbert admits the capital injections reflect weaknesses in the fund but says R&SA is under no obligation to include them in its preliminary reports.

However, analysts say the sums involved should have persuaded R&SA&#39s management – which is looking for a buyer for its life and pensions and asset management arms – to inform shareholders.

Cazalet Financial Consulting principal Ned Cazalet says: “R&SA&#39s management has failed to inform shareholders it has put the money into Sun Alliance & London despite the fact that we are talking about a lot more than £1m or £2m. It is all a bit grizzly.”

Gilbert says: “We allocate shareholders&#39 funds depending on a host of factors and we provided the loan to give the fund support when market values fell. We do not have to include these in the reports.”


£18m City lifeline for Inter-Alliance

National IFA Inter-Alliance is receiving an £18m cash injection from the City to avoid the company being put into administration.The cash boost comes as the firm warned its losses could hit £21.7m for 2001. It said it would have run out of cash by April if the extra money had not been found.The deal, brokered […]

Britannic makes it clear

Britannic Assurance has introduced a with-profits bond that aims to be more transparent than traditional with-profits bonds.The Britannic Assurance with-profits bond builds on the concept behind the Britannic with-profits pension annuity, which brought transparency to with-profits annuities.The bond invests in Britannic&#39s with-profits fund and unlike traditional with-profits bonds, investors will be kept informed of performance […]

The life of Equitable

For a long time, Equitable Life traded on its venerable history. As a national institution it was as hidebound as the tomes on the shelves of the lawyers who have bought its policies.According to Cornelius Walford, the Victorian biographer of the once eminent and recently disgraced institution: “The history of the Equitable is the history […]

Future Mortgages appoints new PR head

Sub-prime lender Future Mortgages has appointed Richard Hurst as public relations and communications manger from IFOnline where he was marketing manager. He will be responsible for internal and external communications and will become a press spokesperson for Future. This is a new role created by a restructure of the lender&#39s communications department following Michael Bolton&#39s […]


Guide: how to change your auto-enrolment support

As we approach the two-year milestone of auto-enrolment, employers have had the opportunity to truly assess the capabilities of their chosen support. They are also now realising that getting to the staging date was the easy part, and that support is required for almost every aspect of the day to day running of their scheme. With the three-year re-enrolment window coinciding for many with the total removal of commission and Active Member Discounts from pension-related products and services, as well as the introduction of the pension charge cap in April 2015, many employers will have no choice but to review their support options. But, what is involved in transitioning your auto-enrolment scheme away from your current support options? This guide from Johnson Fleming aims to outline some of these key areas and provide information and discussion points on what you need to consider.


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