Scottish Equitable to pay out £62.8m in fines and compensation

SCOTTISH Equitable is to pay out £62.8 million in fines and compensation after poor administrative procedures led it to miscalculate pension payments to customers.

The Financial Services Authority said it had fined Scottish Equitable Plc - the legal name for the Edinburgh-based AEGON UK life and pensions business - 2.8 million, and that the company was to pay a further 60 million in compensation to customers.

FSA director of enforcement Margaret Cole said: "This case shows the importance of getting customer administrative procedures right and fixing them quickly when they go wrong."

Scottish Equitable miscalculated the pension payments and future benefits of 774 customers, and failed to spot errors in rebate calculations on a total of 25,000 pension policies, the

FSA said.

The company also failed to issue about 238,000 policyholder documents, and failed to trace 200,000 policyholders who had moved without providing a new address.

Aegon said it expected to have resolved the failings identified by the FSA by April next year. The company has so far paid out 30 million pounds in customer compensation, it added.

"Aegon sincerely regrets that some customers have suffered financial detriment or inconvenience," the company said in a statement.