equitable life compensation

Most of my career was spent at what are euphemistically called Banks That Are Too Big to Fail, ie companies that people love to hate. Before I got corrupted, I spent around a year at a small management consultancy that was based in a building shared with a pub, with a view of cows and sheep.

I participated in pensions from all the companies I worked at, including schemes from 3 countries. The only pension plan I don’t get statements from is from when I was at the consultancy. Because they were so small, they set us up with an external provider, Equitable Life. I was the conscientious sort, so even in my twenties I contributed £200 a month (the max I think) to the pension, which was a big chunk of my salary then.

My life took an unusual turn, I ended up making a career out of being transferred to various places around the world. I sort of forgot about the small pension and didn’t keep track of what was happening for ages. Somewhere along the line, I read that Equitable Life came close to collapsing due to large unhedged liabilities, was no longer accepting new business and wasn’t sure if existing policyholders would be paid. True, I only had a small pension with them, compared with people who have lost their life savings, but it was still bad news.

About a year or more ago, out of the blue, I received a letter from an entity called the Equitable Life Payment Scheme requesting confirmation of my policy details and an explanation that I may be due some form of compensation. Initially I was skeptical, thinking it was a scam, but I did some googling and it seemed to be legit:

The Equitable Life Payment Scheme was set up by HM Government to make fair and transparent payments to Equitable Life policyholders who suffered financial losses as a result of government maladministration which occurred in the regulation of Equitable Life.

When I got back from our trip, there was a letter waiting for me from the scheme. It says that they have contacted all those policyholders it can trace and enclosed a statement on the amount of payment I will receive.

equitablelife2015

From what I can gather, the value of my pension is £5,500 but if the government had regulated Equitable Life better, or if I had invested in a comparable policy with a comparable company, my pension would be almost £7,900. The theoretical loss I suffered is £2,400. There isn’t enough money to compensate me for the entire loss so I’ll be getting £540.

It’s disappointing. Because Big Insurance was allowed to run around promising what it couldn’t afford and not subjected to sufficient oversight, we poor folks are getting a measly 20% of what the return we would have enjoyed. I know, it’s ironic, coming from someone who spent so much time at i-banks. The value of your investment may go up or down, or you can lose the whole lot, isn’t that the disclaimer that goes with every single financial product?

What I’m confused about, and I can’t find any information anywhere, is whether my £5,500 is still around. Has it been lost? Repackaged and sold? Floating around someplace unclaimed? How do I set about finding out, I don’t have any point of contact at Equitable and I’ve never received any communication or statement from them. Again, it’s a small amount compared with other people, but it’s a useful lumpsum.

Anyway, I don’t have the payment yet. Looks like I’ll be getting a cheque, which is annoying because it means I’ll have to mail it back to my UK bank. Who uses cheques anymore? Ah well. At this point, any compensation is better than none.