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Ten counts of maladministration sees company funds plummet

EQUITABLE Life was one of the most highly respected pension providers in the UK - and one of the top performing - until the late 1990s. In 2000 the board went to the High Court to enable it to scrap its guaranteed annunity pledge for pensioners already drawing on their pension pots, but this was declined.

The company immediately halted new business and slashed every pension by 16 per cent.

An initial investigation into what had happened at Equitable Life put the blame squarely on the company management.

However the Parliamentary Ombudsman's inquiry revealed ten counts of maladministration by the FSA and Audit Commission - proving that the Government was liable for compensation.

The Labour Government then asked Sir John Chadwick to explore how much compensation should be paid. His answer of around 500ml has been declared "unsafe" by the Ombudsman.

There is now an independent commission being established to determine the final compensation to be paid.