Troubled mutual Equitable Life today announced that members had backed a compromise deal which the society hopes will end its financial problems.
The scheme, which still needs to be approved by the High Court in London, will cap the pensions liability of just over £1bn sterling which has dogged Equitable ever since it lost a legal showdown in the House of Lords.
It also means policyholders who are still with the society will not be able to sue it for not telling them about the problem when they were sold their policies.
The 240-year-old society has needed to find a way to end its pension liabilities ever since the Lords ruled in July 2000 that it must honour the rates it had promised Guaranteed Annuity Rate policyholders.
GARs, which Equitable began selling more than 50 years ago, guaranteed investors a minimum annuity rate when they retired, often as high as 11.5%.
The society, the world's oldest life assurer, stopped selling the policies in 1988, but falls in interest rates and inflation soon meant the existing policies became expensive to honour.
The mutual tried to get around the problem by paying a smaller final bonus on the policies, but after a long legal battle the Lords ruled that the society must meet the guarantees.
Equitable was forced to put itself up for sale, but on December 8 2000 it announced that talks with Prudential, the last in a line of suitors which included CGNU and European financial services consortium Eureko, had collapsed.
As a result the mutual closed its doors to new business. In February last year things looked up when Equitable announced that mortgage bank Halifax had agreed to buy the society's assets for £500m.
But completion of the deal, and a further two chunks of £250m, were dependent on Equitable reaching an agreement with its GAR policyholders by this March, and certain sales targets being met.
