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Scottish Widows to be named in £1bn pension advice case

Insurance giant Scottish Widows could be facing legal action over claims it misadvised pension schemes. In a dossier compiled by the Actuarial Review Company (Arc), which has been sent to the Financial Services Authority, it is alleged that as a result of the company's advice 100 pension schemes lost £300 million. The advice alleged to have been given by the insurer was to switch from guaranteed annuity funds into a Scottish Widows managed fund with a high exposure to shares. This instruction was issued at the height of the stock market in 1999/2000. Roger MacNicol, director of Arc, commented: "The switch advice was given by employees of Scottish Widows not by independent actuaries. "As a result, the schemes are less well funded, less solvent, and require a higher contribution rate from employer and employee."A spokesperson for Scottish Widows acknowledged that the company was aware of the dossier but did not comment on the claims.

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