DCSIMG

Slip-up leaves Equitable pensioners on their backs again

IF THE latest misfortune to hit Equitable Life pensioners wasn't so tragic, it would be hysterically funny. Do you remember the old Charlie Chaplin gag where the clown keeps bumping into people and objects he hasn't seen? Or should that be Mr Bean?

Whichever, he starts looking where he is going and spots a banana skin lying in his path. Smiling with relief that he's missed the trap, he jumps high into the air to avoid it, only to disappear down a pothole he hasn't spotted on the other side.

Poor Equitable pensioners are just like this sad sap. For six years they have been buffeted and bruised in the financial equivalent of half a dozen rounds in the boxing ring.

They have had to watch their pensions cut by up to half, which is no fun when you thought you had provided adequately for your wife and yourself in retirement.

It's little wonder they rejoiced when the Prudential offered to take them under its wing.

Everything looked brighter after the deal was done at the beginning of the year. They thought their problems were over. Until that is, their first pension payments began dropping on their doorsteps last week, when they found themselves disappearing down more dark tunnels.

More than 2,000 very frail, elderly policyholders were shocked to see their pensions cut again by up to half. They knew there had to be a mistake, but couldn't get any sense out of anyone.

At first, the Pru was adamant there had been no muck-up, until it emerged that HM Revenue & Customs had issued new tax codes to all these people. Even then, the Revenue and the company agreed that, yes, new codes had been issued, but they were all correct.

However, after the Pru began examining the tax positions of some of the individuals caught up in the fiasco, panic bells began to ring.

It became clear that some had indeed been issued with the wrong coding notices. Worse still, those affected were octogenarians or in their late 70s, many in poor health.

They needed a shock like this as much as they needed a hole through the head. Cutting their pensions in half again left some of them without enough to live on.

To be fair, the Pru quickly picked up on the seriousness of the situation. The company has offered to examine in detail the position of any pensioner who believes he or she may have been wrongly taxed, and to refund them within days.

Meanwhile, true to form, HMRC refuses to accept there is any problem and maintains that the new tax codes are correct. A spokeswoman said: "The position is quite unclear and we are continuing our investigations. We believe that the codes we issued to these customers were correct. The Prudential doesn't agree. We are continuing to investigate in an attempt to get to the bottom of the matter."

What a pair, eh? Not so much Chaplin and Bean as Laurel and Hardy, and "Here's another fine mess you've gotten me into."

Deaf to criticism

BACK to banana skins. Pensions Secretary James Purnell found himself sliding around on a veritable grove full when the Court of Appeal delivered its judgment on whether the Government had been justified in turning its back on the victims of company pension scheme collapses and rejecting the Parliamentary Ombudsman's report which found ministers culpable.

To an extent this is all history, because the Government caved in to the victims' demands before Christmas, although we are told that it is not being quite so speedy at coming up with the cash.

Just as well they did, because the Appeal Court agreed with Ombudsman Ann Abraham that the Government was guilty of administration.

However, it is less clear that the Government lost the second part of the case, which related to its right to reject any Ombudsman's findings it doesn't like.

All three sides are closely examining the judgment, and there may yet be an appeal to the House of Lords.

But the point about the Government's right to reject the Ombudsman's findings is important, because we are expecting a highly critical report into the events which brought down Equitable Life before the summer is out.

Given the Government's previous robust defence of its role as regulator to Equitable, we can expect that report to be rejected too.

Which begs the question: why have an independent ombudsman if the Government can simply bin any reports critical of its activities?

Break up the Rock

SO TAXPAYERS are now in hock up to 100bn thanks to Northern Rock.

Will someone please put it out of its misery. Nationalise it, split it up and be done with it.

 
 
 

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