UK - The resignation of Equitable Life's chief finance and investments officer Charles Bellringer has prompted a call for the beleaguered mutual to be sold off.
The firm has already warned that despite cutting payments to its 50,000 with-profits annuitants by up to 30%, it may fail the Financial Services Authority’s minimum solvency test.
Equitable also revealed that it may have to default on payments to its bond holders, who are owed £300m, as its free reserves have fallen from £1.1bn to just £400m.
Hargreaves Lansdown pensions research manager Tom McPhail believes Bellringer’s resignation – coupled with the earlier announcements – makes a closing down sale the best option for policyholders.
McPhail said: “The continued debilitating erosion of policyholders’ investments is not in anybody’s interests. “They have suffered enough already and it is quite clear that going forward, the downside risks considerably exceed any upside potential.
“It wouldn’t be rocket science to retain a completely independent actuary to calculate the total liabilities on the fund and then split up the assets appropriately to the policyholders.
“The whole of Equitable should be sold lock, stock and barrel including the buildings they occupy.”
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.