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Windfall challenge begins in court

The long awaited pension review windfall test case, which will also affect

FSAVC and mortgage endowment compensation, finally started this week in the

High Court in London.

Over 43,000 pension review calculations could be slashed if professional

indemnity insurer Collegiate succeeds in the case.

This would represent about 9.6 per cent of cases outstanding, according to

an FSA statement given to the court.

The case is a challenge to PIA rules that say demutualisation benefits should

not be counted when assessing losses under a pension review.

Collegiate is pro

viding the main funding for the case brought by Needler Financial Services

against investor Ronald Taber.

Taber, whose loss was calculated at £26,000, received shares worth

£10,000 when Norwich Union demutualised in 1997.

Collegiate, which is paying both sides&#39 costs – believed to be around

£250,000 – is accusing product providers of getting a free ride by

refusing to contribute to the costs of the case when they will gain most

from a successful outcome.

Collegiate legal and claims director Martin Archer says: “Providers do not

feel the same pain that IFAs feel as compensation comes out of their

with-profits funds. And the providers do not want a war with the PIA.”

The case is continuing and a judgment is expected at the end of July.


Ombudsman threat to FSA on endowments

The Financial Ombudsman Service is threatening to replace FSA guidance on endowments with its own procedures if it is hit with too many complaints.The FOS says FSA guidance to take notional savings into account when assessing compensation could overcomplicate procedures and lead to a backlog.If this is the case it will streamline the guidance though […]

A staple diet from iShares

iShares, which is part of Barclays Global Investors, has added to its stable of European sector based exchange traded funds with the introduction of iBloomberg European staples.This exchange traded fund aims to provide capital growth by tracking the newly created Bloomberg European investible staples index. The index consists of large European companies involved in consumer […]

Equitable slashes bonuses but MVA is halved to 7.5%

Equitable Life is slashing with-profits pension funds by 16 per cent andlife policies by 14 per cent by cutting terminal bonuses. A fund quoted at December 31, 2000 to have a value of £50,000 willfall to £42,000. If the guaranteed value of the fund is higher, thatvalue will be paid. No reversionary bonus will be […]

Winterthur abandons sale of Sipp arm

Winterthur Life has taken its self-invested personal pensionadministrator, Personal Pension Management, off the market two months afterputting it up for sale, saying the offers received were unsuitable. Credit Suisse-owned Winterthur says it decided in early May to explore thepossibility of selling PPML to a third party following a review of the admincentre to concentrate on […]


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