UK - Royal & SunAlliance has set aside £1.2bn to cover guaranteed annuity option liabilities, but a leading analyst warns there is more pain to come.
R&SA – which is in talks with the Financial Services Authority – faces liabilities on both its £9bn Sun Alliance & London fund and the £11bn R&SA Life & Pensions fund. The SA&L fund has GAO liabilities of over £850m while the R&SA Life & Pensions fund has liabilities of over £300m.
Ned Cazalet of Cazalet Financial Consulting claims R&SA disguised its GAO liabilities by using reinsurers. Cazalet said: “SA&L is in a worse financial position than Equitable Life.
“At the end of the year they appeared to be statutory solvent with an excess capital position of £194m, but actually that’s only after they hid a load of liabilities with reinsurers.”
Cazalet added that the R&SA Life & Pensions fund is suffering from the same problem as its sister fund.
He continued: “Both are in a mess and I think that early indications show that there’s more pain to come.”
Meanwhile, R&SA is to be fined by the FSA over the handling of the pensions mis-selling review. R&SA has not received any indication as to when or the amount that it will be fined.
Although R&SA declined to reveal any further information, it did stress that it was not being fined for mis-selling pensions, rather it was the way that it handled the administrative work which resulted from the review.
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.