Co-operative Insurance Society has cut final bonus rates by 5%, on traditional with profits pensions and endowments. Maturity values on deferred annuity policies will also be reduced by around 8%.
CIS said the cut was due to continued falls in the global stock markets. Chief actuary of CIS, Tim Bunch, said that the reductions in final bonuses ensure that payouts reflect more fairly what savings have earned. Mr Bunch added that as the reductions are less than the fall in the value of the investments, policyholders will continue to benefit from the effect of smoothing.
The reduction in final bonuses applies to policies maturing on or after 1 October 2002.