Norwich Union With Profits Reattribution

Norwich Union has set a huge task when they decided to reattribute their with profits funds, a redistribution of surplus assets to policyholders in their with profits funds.  

The funds that are involved in the reattribution are CGNU Life and Commercial Union Life Assurance Company (CULAC) with profits funds, which would also include Norwich Union Life (RBS) Ltd, and Norwich Union International Limited policies.  In order to ensure that everything is done correctly, they have extended their timetables accordingly.  

Notification to customers and pension scheme trustees will be offered and an invitation to accept or not will be issued in Spring 2008.  Those that accept the reattribution offer will receive payment in Summer 2008.  You would still be treated as being eligible for the reattribution payment if you elect to take your money on the current maturity date shown on your policy document, or if a death claim arises causing the policy to end.   If you increased your investments in the with profits funds, in the hope you would increase your reattribution payment, this would not work, your reattribution payment would remain the same.  

However, if you partially cash in, cancel, transfer or switch funds, and you may find that you have reduced the amount of reattribution bonus that you received.  This does not apply to regular withdrawals set up before the 21 November 2006.   You would not be eligible for a reattribution bonus if you cash in, cancel, transfer or switch out of the with profits funds completely or if you transfer ownership of your policy before you have been asked to take part in the reattribution.  Any bonus payable would be paid to the new policyholder.  All of these conditions only apply if the reattribution goes ahead.  

Our view

The redistribution of surplus with profits funds is a valuable and worthwhile exercise.  It will not be easy and it will take time.   Be careful about any early encashment of your older Commercial Union and Norwich Union policies.

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