'Doom and gloom' Equitable

A LEADING pensions expert accused troubled insurer Equitable Life of running a pyramid savings scheme and of fobbing off policyholders with 'inadequate' information on its compromise proposal.

Professor David Blake, director of the Pensions Institute of Birkbeck College, London, also criticised the Financial Services Authority and its predecessors for failing to intervene.

In a report for the Equitable Members Action Group, Blake said Equitable operated like a 'Ponzi' or pyramid-scheme. Blake criticised Equitable's new board for failing to provide up-to-date information on the solvency of its with-profits fund, on how many policyholders have left, and on what will happen to the fund after the compromise vote.

He said chairman Vanni Treves and chief executive Charles Thomson had run a 'doom and gloom' media campaign, warning of the consequences of voting against the compromise. Blake said it might still be better to vote 'yes,' but that policyholders had a right to more information.

Treves said: 'This is a distraction from the important issue of the vote. It is bizarre to call for more information when people have already received hundreds of pages of relevant facts.'