Standard Life is dropping its s32 contract from its product range next month, saying it is not economical to keep writing the business.
But the firm, which is currently reviewing its mutuality, denies the move is to cut exposure to its with-profits fund from guaranteed minimum pension obligations.
Standard says it is dropping its s32 because it does not meet Raising Standards requirements and would cost too much to make compliant. It was among the first firms to offer s32 contracts in the 1980s when GMP obligations were met through the with-profits fund.
Standard says it is cutting the product because it sees no long-term future for it after A-Day although Skandia is offering a new s32 contract because it sees it as a selling opportunity for the product as investors move from poorlyperforming funds and protect tax-free cash before A-Day.
Standard Life spokeswoman Patricia Corrigan says: “We are pulling our s32 from June 25. This is because we do not see a long-term future for the product after 2006. Making our s32 comply with Raising Standards is not worthwhile for the time left before the product becomes obsolete.”
Intelligent Pensions technical manager David Trenner says: “The last sort of business Standard wants to be writing at the moment is old-style s32s with a with-profits element.”