Widows accused
27/05/2008
Life insurance firm Scottish Widows is facing a legal claim over alleged mismanagement of pension fund schemes.
Scottish Widows faces an imminent legal action for up to £1 billion after allegedly giving "negligent" advice to about 100 company pension schemes.
The Edinburgh life assurer has been accused of encouraging the schemes to switch from guaranteed deferred annuity funds into a Scottish Widows managed fund with a higher exposure to share price movements.
The Actuarial Review Company (ARC), an independent consultancy that represents one of the pension funds' trustees, says the move also removed protection from improved lifespan projections for pensioners.
These have led to much higher pension scheme costs in recent years, and ARC claims it effectively transferred the risk of pensioners living longer from Widows's balance sheet to the individual company plans.
