I feel for the Norwich Union with-profits policyholders trying to get their money out as it is never an easy task given the nature of the products and they are right to bring attention to the issue. However, the action group’s focus on reattribution misses the bigger point and that is that falling asset values mean many with-profit funds are struggling and insurance companies are hiking their penalties or market value reductions (MVRs) meaning any “bonus” from reattributions could easily be wiped out by the companies incrementing penalties.
With-profits plans are held by about 12 million people in the UK and it appears that the penalty situation for these people is generally worsening, despite the recovery this year in markets. This fact should be setting deafeningly loud alarm bells ringing as if penalties are getting worse this year during this backdrop, then what on earth will happen to values and penalties if markets turn the other way?
With-profits warrant a thorough examination, and reattribution should be marked out for special attention but it is one of a long list of areas and is comes a poor second to rising MVRs in a recovering market.
You say that our Norwich Union Policyholders’ Action Group’s focus on reattribution misses the bigger point. http://groups.google.co.uk/group/norwich-union-policyholder-reattribution
Our action group is very well aware of the much wider picture affecting with-profits funds about which you write. However, because the most pressing issue for us is the impending reattribution SCAM, which has deadlines of court dates in the next few months, it is absolutely ESSENTIAL that we focus our attention on the most pressing issue in order to attempt to defeat Aviva in the forthcoming legal proceedings. Aviva applied the MVR for a continuous period lasting almost 6 years from 2001, and the Inherited estate will have increased, in part due to the money retained from policyholders exiting the funds in these circumstances. Aviva is even applying the MVR in calculating the payments of the Special Bonus which is outrageous because the MVR can only be applied on “cancellation of Units”. Aviva takes every opportunity to pull fast ones throughout.