Vote deadline looms for Equitable Life members

Members of troubled mutual Equitable Life have until tomorrow to cast their postal votes in a compromise deal which aims to solve the society’s Stg£1.06bn (€1.7bn) pensions liability.

Policyholders must return voting forms to Equitable by January 9 or vote in person at its extraordinary general meeting this Friday if they are to have their say in the fate of the world’s oldest life assurer.

Equitable today renewed its call to members to back the scheme.

Chairman Vanni Treves has repeatedly urged members to vote following fears that some may not due to apathy or the expectation that they may get compensation from the British government.

He has warned that if the compromise fails there is no plan B, and the society would face a ‘‘bleak future’’ in which the uncertainty and instability would continue.

He has also urged members not to expect compensation from the British government, which regulated the life insurance industry before the Financial Services Authority was created, or as a result of legal action the society is considering taking against the mutual’s former directors and advisers.

If the scheme is to go ahead it must be supported by 50% in number and 75% in value of all voting groups.

Mr Treves has described the 75% in value hurdle as a ‘‘Beecher’s Brook’’ which the society can only get over if as many members as possible cast their vote.

But some people have labelled the deal a ‘‘Hobson’s choice’’, while others have complained that members have not been given enough information to decide how to vote.

There has also been confusion among members over how many votes each policyholder has as, due to a legal technicality, non-Guaranteed Annuity Rate policyholders must vote twice on both the uplift being offered to Guaranteed Annuity Rate policyholders (GARs), and agreeing not to sue the society.

A deal must be in place by March this year if Equitable is to qualify for an additional £250m (€403m) payment from Halifax, which bought the society’s assets for £500m (€806.6m) last year.

Equitable has been dogged by uncertainty ever since it lost a legal showdown in the House of Lords over the rights of its GARs, leaving it with a £1.06bn (€1.7bn) pensions liability.

Under the deal, GARs are being offered an increase of around 17.5% in their policy value for agreeing to give up their rights to guaranteed rates, and non-GARs are being offered a 2.5% uplift in exchange for agreeing not to sue the society and accepting the increase being offered to GARs.

The result of the vote will not be known until at least two weeks after the January 11 EGM.