Equitable board makes final push to win policyholders' support for rescue plan

The board of Equitable Life and leaders of action groups at the stricken life assurer yesterday issued a last-minute plea for as many policyholders as possible to take part in this week's crucial vote on the society's rescue plan.

The board of Equitable Life and leaders of action groups at the stricken life assurer yesterday issued a last-minute plea for as many policyholders as possible to take part in this week's crucial vote on the society's rescue plan.

The appeal comes amid indications that the outcome of the ballot, which closes on Friday, is on a knife-edge. Those voting by post must do so by Wednesday.

Equitable needs the support of 50 per cent of policyholders by number and 75 per cent by value to push through a compromise deal to cap its exposure to guaranteed annuities.

There are two separate votes – one for Equitable's 70,000 holders of guaranteed annuity (GAR) policies and the other among the estimated 415,000 non-GAR policyholders. But the key to the outcome could lie in how the 6,000 "corporate" policyholders vote. These are the pension schemes which between them have 610,000 members and account for a high proportion of Equitable policies by value.

Vanni Treves, Equitable's chairman, is concerned that a high proportion of trustees of the 6,000 group pension schemes have not yet voted, possibly leaving themselves open to legal action.

Mr Treves said yesterday: "It's very important that trustees exercise their vote. Many have a large number of members relying on them."

And the chairman of one of the leading Equitable Life action groups warned yesterday that abstaining from this Friday's crucial compromise vote "is not an option." Paul Braithwaite said: "A lot of policyholders have a misapprehension that if you don't vote you will not be bound by the decision, but that is not so. It will be binding on all policyholders. When one is on the Titanic, survival should be the priority."

Last week the National Association of Pension Funds declared that voting in favour was "likely to be in the best interests of the majority of pension scheme members."

About 1,000 policyholders are expected to attend this Friday's meeting at the Wembley Conference Centre in north London to vote on the scheme under which Equitable is offering policy uplifts averaging 17.5 per cent to policyholders with GARs in return for their waiving their rights to a guaranteed pension amount. Non-GAR policyholders are being offered 2.5 per cent for agreeing not to sue the society for mis-selling these policies.

If the scheme goes through by March the Halifax mortgage group is committed to contributing £250m to Equitable's £20bn funds.

However the vote is not the end of the saga. When the results have been calculated they will be put to Mr Justice Lloyd sitting in the High Court for him to ratify. Mr Justice Lloyd will receive separate representations from policyholders and other interested parties before he finally decides whether to ratify the compromise. Although no minimum number of votes is required for policyholders to pass the scheme, the judge is bound to take into account the level as well as the balance of voting, so the outcome is by no means clear cut.