What's the time Mr Wolf?

Speaking with an Aviva policyholder this afternoon, she had realised that the length of time you intend to stay in the Aviva with-profits fund was critical to whether to accept the reattribution offer, but she was frustrated that noone could say what length of time one needed to wait. Unfortunately that's because noone knows.

If this is the sticking point for you, there are two time periods that you need to consider:

1. Time to wait until the next Special Distribution might be worth more than your reattribution offer, and
2. Time to wait until Aviva might actually make their next Special Distribution (after the one due in January 2010).

On the first issue, both Aviva and the Policyholder Advocate have issued guidelines. Personally I find the figures provided by the Policyholder Advocate to be more plausible. Her calculations are based on the type of policy held and you can read about those in the purple book sent with your offer. Alternatively we have links on our website http://www.reattribution.com/. Broadly her conclusions are if your policy matures before 2016 you're likely to be better off accepting the offer and if you can wait beyond 2022 any future special distribution is likely to be better than your reattribution offer. Please refer to the Policyholder Advocate's guide for full details.

On the second point, it's worth noting that special distributions out of the inherited estate are fairly rare occurrences. This may change in the future of course, particularly as one might imagine that Aviva's shareholders will be keen to get a retun on the investment made in buying out policyholders' rights with the reattribution offer. However, I'm more inclined to see this as a long-term plan for Aviva. Despite some fairly resilient With Profits Bond sales figures announced this week, regular savings with-profits endowments and pensions appear to have all but died a decade ago. The point where the inherited estate can be safely distributed is when the large liabilities connected with these endowment and pensions have left the books. These policies were the main investment choice up to the mid to late 90s and a 25 year endowment sold in 1999 would mature in 2024. So my crystal ball says you may be looking at being a policyholder for another 15 years, possibly longer before the next special distribution.

In addition to a long term on your policy, you also need to be sure that you are willing to stay in the fund that long. Again, http://www.reattribution.com/ should help you work through reasons why you might choose not to keep it that long.