According to research conducted by YouGov, only a third of Norwich Union with-profits policyholders think that the reattribution of the inherited estate, which means giving policyholders back the excess surplus money in the funds, is a good idea. Over 40 percent indicated that they had not got enough information to be able to give an opinion.
Clare Spottiswood has been appointed the policyholder advocate for Norwich Union to oversee the reattribution plans. The survey also found that windfall payments were more popular than added bonuses, and most policyholders felt that they had been given the right opportunity to express their views. Although, Spottiswood is encouraged by the response Norwich Union has had, there is no guarantee that the reattribution deal will take place, and if it does, it will not be finalised until 2008.
Our view
Contractually, reattribution is the right way to distribute these excess funds, as it is the funds that have generated the excess ‘profits’. We agree with the lack of information. In a recent dealing with Norwich Union over a company pension scheme, the staff were unable to give an idea of what the likely reattribution amount would be or when it would be for a client that retires in two weeks. This makes it even more difficult for us to advise a client on retirement annuity purchase.