Press Coverage of Delayed Report

Equitable Life report delayed again

By Nicholas Timmins, Financial Times
Published: December 11 2007

Publication of a long-awaited report into the Equitable Life debacle has been put back until next summer. Campaigners hope the report may finally force the government to pay compensation to the hundreds of thousands of people whose pension savings were hit by the fiasco at the mutual.

The postponement is the third delay to the final outcome of an inquiry first announced in July 2004.

Ann Abraham, the ombudsman, has told MPs that she will not be able to provide a publication date for her inquiry until April next year. She is waiting for responses from the Treasury, the Financial Services Authority and other organisations to a further draft she has completed.

Campaigners reacted with anger to the decision:

“It will be four years after the inquiry started and seven years since the scale of the losses became clear before we finally get the report,” said Paul Braithwaite, general secretary of the Equitable Members’ Action Group.

The report has been delayed, in part, by the voluminous response the Treasury filed to Ms Abraham’s original draft report earlier this year.

Mr Braithwaite accused the Treasury of “throwing the kitchen sink at it” to ensure it was not published before Gordon Brown moved from being chancellor to prime minister.

Mr Brown also came under fire from the Conservatives who wrote to him urging the approval of a rescue package for another set of pensioners – those whose companies went under before the creation of the Pension Protection Fund.

Chris Grayling, the party’s pension spokesman, said he understood that pensions ministers had constructed a more generous compensation package for the 125,000 or so people affected, but were being blocked from announcing it.

“I can assure you”, he said in a letter to the prime minister, “that you will have cross-party support for a rescue package, and can only urge you to allow such a package to proceed as quickly as possible.”

Meanwhile, the latest figures from the Pension Protection Fund show that last month, defined benefit pension funds slipped back into overall deficit for the first time in a year.

A surplus of £53bn ($108bn) in October became a £5bn ($10bn) deficit as both gilt yields and equity markets fell.

But Mike O’Brien, the pensions minister, offered some good news for those in contracted-out money purchase schemes as he announced proposals to allow them to invest their contracted out rights in self-invested personal pensions (SIPPs).

An estimated £75bn to £100bn, made up of the rights built up from the contracted-out rebate, cannot currently be put into a SIPP, but ministers are now consulting on abolishing that restriction.

Equitable Life report

SIMON BAIN, THE HERALD December 11 2007

Ann Abraham, the parliamentary ombudsman, signalled yesterday that the government has delayed what is likely to be a second highly critical report from her office on government maladministration.

Abraham has told MPs and policyholders in Equitable Life that it could be a further 10 months before her report on Equitable is published - about two years late. She said the delay occurred because her office had to examine 500 pages of representations from the Treasury and Financial Services Authority on her draft report that was submitted to them last January.

Abraham said she has "now had time to digest" everything the regulators gave her, last April, and has written back to them giving them a further chance to respond to her conclusions.

She hopes to be able to tell MPs, next April, when the final report might at last appear, possibly not before the summer recess in July which would mean October.

Campaigners responded that it was now six years since £4bn was wiped off 1.5 million Equitable policies due to regulatory failure, while "Northern Rock investors were saved in six days".

Paul Braithwaite, secretary of the Equitable Members Action Group, said: "I don't doubt for a moment that the report will find the government guilty of maladministration and recommend substantial compensation - otherwise why would there have been so much shenanigans with the Treasury?"

He added: "The government are doing everything they can to resist the ombudsman's reports, while challenging her through the courts."

The delay follows the government's refusal to comply with Abraham's findings in a previous report that it was guilty of maladministration in occupational pensions. The ombudsman recommended that the government properly compensate the victims of company pension collapses that predated the Pension Protection Fund in 2005.

Her verdict was upheld by the High Court last year, in a case brought by four retired workers who lost their pensions, but the Department of Work and Pensions appealed against it in July and the judgment has yet to be published.

Meanwhile the Financial Assistance Scheme, set up to provide limited help to the 125,000 pre-2005 pension victims, is now at the centre of a reported Cabinet rift.

Peter Hain, the work and pensions secretary, let it be known at the weekend that Prime Minister Gordon Brown - as reported by The Herald last month - is resisting the findings of the FAS review that Brown himself set up when under all-party political pressure on the issue in May.

The Young review, submitted to Hain at the end of November, is said to have recommended a rescue package using largely money already in the wound-up schemes to bring the FAS into line with the PPF, but its publication has been delayed due to opposition from the Chancellor and Prime Minister.

The FAS, claimed by Brown to be "worth £8bn", has so far paid out £9m to barely 1000 people and cost £10m to run.

Ros Altmann, adviser to the Pensions Action Group, commented: "The money is there, it just needs to be paid. These people are desperate, and after Northern Rock there cannot be any more excuses. Good people are being left to have another dreadful Christmas."

The Department of Work and Pensions has said it will "consider the findings carefully and make an announcement in due course".

Braithwaite added: "Gordon Brown's stubborn refusal to do the right thing for the occupational pensioners augurs ill for next summer, when we expect the government finally to allow the (Equitable) report to see the light of day."

Third delay for Equitable report

BBC website
Tuesday, 11 December 2007,

Ann Abraham's report was originally due to be published in 2005.

Campaigners have criticised a further delay to a study into the government's regulation of Equitable Life, the insurer that nearly collapsed in 2000.

The Parliamentary Ombudsman report will now not be published before April 2008.

The ombudsman, Ann Abraham, blamed the delay on "substantial representations" received from government bodies in response to her draft report.

Policyholders argue the continuing delay is doing "immeasurable" damage to trust in financial services.

New timetable

This is the second report about Equitable from the Parliamentary Ombudsman.

Ann Abraham's first report was published in July 2003, and cleared the Financial Services Authority (FSA) of any wrong doing.

In July 2004 she announced she would reopen her investigation, and focus on the government's role in regulating Equitable.

The damage to trust in regulators and the finance industry done by the Equitable debacle is immeasurable Paul Braithwaite, Equitable Members Action Group

She had originally expected to publish her report by the end of 2005, but subsequently announced a series of further delays.

In January she issued a draft report to the government and the FSA which prompted "substantial representations" in response.

She has now reviewed her report in the light of those responses, but, as before, plans to circulate her revised draft to relevant public bodies and other interested parties.

She said she would write to MPs again towards the end of April 2008 with details of a new timetable.

Equitable Life campaigners condemned the announcement that the report would not now be published until next year.

Policyholders hope the report could pave the way for the government to pay compensation if it is criticised.

"Every delay has been orchestrated by the Treasury," said Paul Braithwaite, general secretary of the Equitable Members Action Group.

"The damage to trust in regulators and the finance industry done by the Equitable debacle is immeasurable," he added.

'Excessively lenient'

Equitable closed to new business in 2000, after the House of Lords said it had to honour promises made to pension policyholders which it could not afford to pay.

More than a million policyholders in the UK and several thousand in Ireland and Germany saw the value of their policies fall sharply as a result.

In June the European Parliament called on the UK government to compensate policyholders after a report from MEPs said it had failed to ensure that EU legislation on insurance had been implemented properly.

It also said that the UK's system of financial regulation had been "excessively lenient" in failing to ensure that Equitable was solvent.

Report on Equitable collapse delayed again

By Yvette Essen, Daily Telegraph
11/12/2007

A million pensioners have been left frustrated once again after the long-awaited report into the collapse of Equitable Life was delayed for a third time.

Ann Abraham, the Parliamentary Ombudsman, said her findings into whether the Government failed to regulate the mutual insurer correctly in the run-up to its collapse in 2001 would not be published until after April. It was initially due to be published by the end of 2005.

Ms Abraham has written to MPs, saying the report has been delayed to incorporate "substantial representations" she had received from government bodies whose actions are subject to investigation.

These were the Treasury, the Financial Services Authority and the Government Actuary's Department, which had been sent a draft of the findings in January. The draft is understood to have run to 500 pages.

Roger Mattingly, chairman of the PR committee of the Society of Pension Consultants, said the latest delay is yet another blow to Equitable policyholders who are hoping they could gain compensation from the Government if Ms Abraham finds it failed in its role of regulator.

"The delayed report is a big setback for Equitable policyholders, who are entitled to be asking questions. This matter needs to be brought to a conclusion as soon as is possible for the benefit of all concerned. "

A spokesman for Equitable said: "We share our policyholders' frustration at the continuing delays in publication of this important report."

Equitable was a £26bn company when it was brought to its knees in 2000 after it was unable to pay policyholders guaranteed bonuses. It was forced to close to new business and has since been selling off chunks of its company.

Pensions campaigner Ros Altmann said: "I do feel very sorry for the Equitable Life members and the fact that they are waiting so long for a verdict. It must be difficult for some of the older pension members to see this dragging on for such a long time.

"However, even after Ms Abraham publishes her report, it is not clear that the Government will accept any findings or recommendations she makes.”

Equitable Life report delayed again

The Press Association

Publication of a long-awaited report into Equitable Life is being delayed for the third time, the Parliamentary Ombudsman announced.

Ann Abraham said the report, which looks at the role played by the Government in the regulation of the mutual up to December 2001, would not now be published until after April.

It is unlikely the report will be published until the summer, and since it can only be made public while Parliament is sitting, it could be further delayed if she does not finish it before the summer recess.

It is the third time the report, which was first due to be published by the end of 2005, has been delayed.

The latest update is itself more than a month late, as Ms Abraham had intended to inform MPs about her progress in October.

The delay is a blow for Equitable policyholders as the report could pave the way for Government compensation if Ms Abraham finds it failed in its role of regulator of the society.

Ms Abraham blamed the delay on the "substantial representations" she had received from the Government bodies she had issued a copy of her draft report to, which is understood to run to 500 pages.

She issued a draft report to the Treasury, City watchdog the Financial Services Authority and the Government Actuary's Department in January this year.

In May she warned MPs that she would need "some time" to review her report in the light of their responses, while she would also give the groups the chance to respond to her revised draft report before reaching her final conclusions.

In a letter to MPs, published on Monday, Ms Abraham said: "I have now completed my review of the draft report in the light of the representations made by public bodies. I have written to the principal officers of those bodies to inform them of the results of that review and to provide them with a statement of the provisional views that I am minded to set out within my revised draft report."

The long wait for justice at Equitable Life

Jeff Prestridge, Financial Mail Personal Finance Editor
9 December 2007

The long wait for justice at Equitable Life Ann Abraham, the Parliamentary Ombudsman, has just updated the battered and bruised policyholders of Equitable Life about the progress of her long-awaited report into the suspect regulation of the mutual before it hit the rocks in late 2001.

Like all Abraham's previous progress reports on Equitable Life, it is not good news, just confirmation of yet more frustrating delays.

As yet there is not a sniff of the £4bn of compensation that some policyholders are hoping Abraham will recommend the Government pays - for idly standing by and allowing people to continue to take out policies with the mutual in the late 1990s when it knew Equitable was teetering on the edge.

Her update, itself more than a month overdue, tells policyholders that her report is not likely to be published until next summer at the earliest. But given that the report must be presented to Parliament - whose members spend most of the summer on holiday - I wouldn't be surprised if it doesn't see the light of day until October 2008.

And given that Abraham's original plan, when she announced she would be conducting the inquiry in July 2004, was to publish within a year, it is not surprising that many policyholders campaigning for compensation are becoming increasingly agitated over the delay.

Abraham cannot take all the blame for the tardiness in completing this report. She put together a draft in January this year which she duly sent - as she is required to do - to the Financial Services Authority, the Treasury and the Government Actuary's Department for comment. It is these three public bodies whose actions Abraham is investigating.

What she could not have anticipated was a joint response 500 pages long. It is the length of this response - a deliberate exercise in tying Abraham up in knots - that has stalled her.

Having now adapted her report in light of these comments, Abraham will soon send it out to complainants for their say. She will then start preparing her final report.

Let's hope that when she can eventually publish her findings over regulatory failure at Equitable Life, it is worth reading.

A lot of customers, horribly wronged, are relying on this stoic woman to see justice prevail. It would be a travesty if the report ended up no more than a fudge.