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Treasury sets out how Equitable Life Payment Scheme will work

Government Communications (NDS)

16 May 2011

The Equitable Life Payment Scheme design document sets out:the Scheme rules;the Scheme administration and timetable;the methodology behind loss and payment calculations;the Scheme's approach to making payments;the details of the queries and complaints procedure; andthe plans for communicating with policyholders.In line with the Financial Secretary's ambition to start making payments by the middle of this year, the Scheme is on track to make the first payments before the end of June. Mark Hoban, Financial Secretary, said: "Today, I am setting out the design of the Equitable Life Payment Scheme for Parliament, policyholders and all other interested parties to see. This is a complex issue, but the Scheme has been designed to reflect the principles of fairness, transparency and simplicity. "When payments start in the middle of this year it will be a huge milestone for the policyholders, who have waited so many years for the resolution of this matter."Policyholders do not need to do anything at this stage - the Scheme will contact them in the first instance to provide further information.Notes for Editors1. The Equitable Life Payment Scheme design document can be found here: http://equitablelifepaymentscheme.independent.gov.uk2. The Scheme design reflects the actuarial analysis carried out by professional services company Towers Watson, the evidence and arguments received in response to the Government's call for representations following the publication of Sir John Chadwick's advice, and the recommendations of the Independent Commission on Equitable Life Payments.3. The Scheme also reflects previous announcements that With-Profits Annuity policyholders will have their losses covered in full, and that Scheme payments will be free of tax and will not affect eligibility for tax credits.4. The Spending Review on 20 October 2010 announced that in the region of £1.5 billion would be available for the Payment Scheme, £1 billion of which would be paid out upfront over the first three years of the Spending Review period.Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by email to public.enquiries@hm-treasury.gov.uk, or can visit http://equitablelifepaymentscheme.independent.gov.uk or call 0300 0200 150.This Press Release and other Treasury publications are available on the HM Treasury website hm-treasury.gov.uk For the latest information from HM Treasury you can subscribe to our RSS feeds or email service.Media enquiries should be addressed to the Treasury Press Office on 020 7270 5238.