Transferring out of the Equitable Life fund could be better for some investors than waiting for compensation that may never materialise, broker Hargreaves Lansdown said this week.

Transferring out of the Equitable Life fund could be better for some investors than waiting for compensation that may never materialise, broker Hargreaves Lansdown said this week.

It also warns that any compensation owed will be "fiendishly complicated" to calculate as "many investors in Equitable have actually done better than those in other with-profits funds".

While transferring out of the fund at this stage may or may not exclude the investor from future compensation, there was the continuing risk of further poor investment performance.

Tom McPhail, the firm's head of pensions research, said: "Equitable investors need to take a realistic view of the possible timing and amount of any future compensation payment for their own personal circumstances."

Paul Braithwaite, secretary of the Equitable Members Action Group, said "better performance" referred to some 25-year maturing policies. "What 25-year pay-outs are achieving from Equitable in 2008 is totally irrelevant because those policies were started in 1983, enjoyed over-bonusing in reversionary bonuses for a decade and received the GAR (guaranteed annuity rate) uplift.

"There were probably only 150,000 policyholders in 1983. The vast majority of Equitable victims joined after 1994, have suffered and were entitled to the proactive requirements of regulators from the (European) Third Life Directive introduced into UK law in July 1994. It didn't happen."

Trevor Stearn, an oil industry consultant in Aberdeen, says the Equitable Life debacle has cost him between £100,000 and £135,000 of his pension.

But that was not all. "The overall cost was over £5000 to myself, hundreds of man-hours usually at evenings and weekends, and untold stress to me and my family - whenever this subject came up it was not good news."

Stearn became a policyholder in Equitable Life in 1988 in his then employer's executive pension plan, but restrictive pension rules, which were tightened further by Gordon Brown as Chancellor, made it almost impossible for him to transfer the pension into his own company. By June 2000, Equitable was quoting his fund at £410,000, most guaranteed but including some £80,000 of bonus. "The bonus was sold as part of the with-profits package, along with smoothing," Stearn recalls.

In July 2001, he suffered Equitable's shock 16% cut in all policy values, and in December 2002 a further 20% "market value reduction" of his fund, even though he was only transferring it across into Equitable's money pension fund.

When Stearn finally got his money out in 2004, he paid for three actuarial reports on his fund to contest Equitable's terms of transfer to a personal pension. Equitable eventually conceded he was right. "They then reneged on it, and said the deed had already been signed and could not be changed."

In February this year, seven years after his first letter to Equitable asking to leave the fund, Stearn received a cheque for £500, awarded by the Pensions Ombudsman "for stress and inconvenience".

But the ombudsman exonerated Equitable on all key points. Stearn, who also used five independent financial advisers along the way, comments: "The ombudsman failed to take actuarial advice but was minded to accept Equitable's figure, and he questioned why I had not used an IFA continuously for advice - if I paid an IFA £180 an hour every time there would be no point in having a pension."

The ombudsman also ruled that the bonus element of Equitable's pension valuation was "not guaranteed and therefore illusory", Stearn says, adding: "It might be an illusory figure to an ombudsman, but it wasn't to me."

Although he left Equitable Life four years ago, Stearn has continued to support the Equitable Members Action Group with donations. "They have done a fantastic job, they have some very bright individuals and have managed to get noticed at the highest levels."

He concludes: "It is fair to say that if any sane individual who had put their money into Equitable Life had known what was going on behind the scenes, none of us would have put a penny in there."

Braithwaite added: "It's time the government stopped hiding behind one inquiry after another and did the moral thing to bring this sorry saga to a close."

More than 800 people have so far joined the group's regional campaign at www.emagregional.org.uk.