A High Court hearing has today approved plans for Aviva’s reattribution of its inherited estate. The decision paves the way for the deal to be concluded as scheduled on 1 October and for the vast majority of payments to be made to customers before the end of the year.
The next step will take place later this month when Aviva requests final approval for the plans from its boards.
Mark Hodges, chief executive, Aviva UK Life, said: “Today’s decision by the High Court is an important step towards completing the reattribution. We believe the offer represents good value for 99% of our customers and the High Court’s approval brings individuals closer to receiving their tax-free payments.
“This is not a majority vote customers have an individual choice. Only those that vote ‘yes’ will receive a payment. All policyholders, regardless of whether they accept the cash offer, will continue to receive their normal bonuses and the payment will have no impact on the security or performance of their investment.”
The reattribution offer is in addition to the special bonus of £2.1 billion allocated to policyholders at the beginning of 2008, of which two-thirds has already been added to policies. The last special bonus payment will be added in 2010. Through the special bonus and reattribution payments Aviva will have allocated the equivalent of around 70% of the value of the inherited estates to customers.
Policyholders still have a few days in which to vote, but they need to act quickly and return their forms before 21 September to ensure their vote is registered. The reattribution is expected to be completed on 1st October and if votes are not received before this date then customers will not be able to participate. Customers who have already voted do not need to do anything further. For more information policyholders can go to www.aviva.co.uk/fundtransfer, or call our helpline: 0800 051 1566.
To date (18 September 2009), more than 85% of policyholders have responded with 96% of those saying “yes”.
About the reattribution:
- The individual offer made to eligible policyholders is based on a value of the inherited estates of £1.2 billion and automatically increases if the estate value is higher. The estate value used is the average of the values at the end of June, July, August 2009. The provisional average for June and July is just over £1.2 billion.
- Following the High Court approval, the Boards of Aviva and Aviva UK Life will, as provided in the Scheme, finally review the position immediately prior to October 1 to ensure that there has been no material change which would adversely affect the Aviva Group or implementation of the Scheme.
- Assuming an estate value of £1.2 billion, around 90% of policyholders who voted ‘yes’ could expect to receive a cash payment of between £200 and £1,200, with the remaining 10% receiving more. Nearly all of the cash payouts will be tax free and Aviva expects to start making payments to policyholders in November, with the majority completed by the end of the year.
- Nearly all of the cash payments will be tax-free and Aviva expects to start making payments to policyholders in November, with the majority completed by the end of this year.
