Back to news 1 May 2014

Equitable Life with-profit policies

Reuters Pension Fund members with investments in Equitable Life with-profits funds may find a recent announcement by Equitable Life of interest. 

Equitable Life announced the following improvements to with-profit benefits with effect from 1 April 2014. 

  • Increase the capital distribution to 25% 

The 25% capital distribution is calculated on the value of each member's with-profits investment at 31 December 2013. For every £1000, an extra £250 is allocated to that value. When members withdraw their investment from the Equitable Life policy, the value of their benefits plus the capital distribution is compared with the guaranteed value and the higher amount is paid (the guaranteed value is stated on each member's benefit statement, if applicable).

Previously, the capital distribution applied to member's benefits on withdrawal was 12.5%. Equitable Life has however pointed out that the 25% capital distribution is not guaranteed and could go up or down in the future, depending on, among other things, regulatory requirements and its capital needs from time to time. 

  • Removal of the 5% exit charge when individual scheme members take their benefits early
  • Removal of the minimum exit charge for scheme bulk surrenders

Equitable Life said it is not making the improvements to encourage members to withdraw from its with-profit policies. Equitable Life said that getting capital back into the hands of its with-profit policyholders, as fairly and as soon as possible, remains at the heart of its strategy and that there are plans which will support further increases in capital distribution, if successful. 

More information on Equitable Life can be found on their website at