The venerable institution was brought to the brink after making promises it could not keep

Equitable Life, the world's oldest mutual life insurer, was once venerated as a blue-blooded financial institution and entrusted with more than £30bn of investors' cash. But a chain of events pushed it to the brink of collapse.

The seeds of the scandal were sown more than 50 years ago when the company started offering pension plans promising a minimum income when people retired. When these guarantees became too expensive, the company reneged on the promises it had made, and also opted not to build up a reserve of cash to cover the cost of meeting them. But a decade ago, the House of Lords ruled that its actions were unlawful. This threw the firm into chaos, and it repeatedly slashed the value of a million people's retirement savings and investments as it battled to stay afloat.

For years, the Labour government resisted calls to compensate policyholders, despite evidence of regulatory failure, but then, in early 2009, it finally agreed to look into limited payouts for those who had suffered "disproportionately".

Much of the credit for keeping Equitable Life in the limelight has to go to Emag, the Equitable Members Action Group, which has wooed the media, badgered officials and organised photo opportunities involving coffins, to symbolise the 15 Equitable Life pensioners who die each day "waiting for justice". Last year it recruited former Avengers star and Bond girl Honor Blackman as its "figurehead". She said that half of her Equitable pension "went down the drain" as a result of its near-collapse.

Many Equitable Life policyholders hold Gordon Brown to blame for some of their woes, but the former prime minister was himself a policyholder of an Equitable Life offshoot. Up until at least 2001, Brown held a policy with University Life, a wholly-owned subsidiary of the firm until it was sold to another insurer three years ago, though it is not known whether he still holds it.

The Canada Pension Plan Investment Board is bidding for Tomkins, while the Ontario Teachers Pension Plan recently bought Camelot and has a 27% stake in Northumbrian Water

As domestic pension funds sell their stakes in British companies, their place is increasingly taken by pension funds from Canada.

The $127bn (£84bn) Canada Pension Plan Investment Board, which is bidding for Tomkins, already owns stakes in about 35 companies including chemist Alliance Boots, US retailer Dollar General, internet phone operator Skype and US phone-equipment maker Avaya.

The pension fund manager, stung by a near 20% loss in 2009, has made offers for a string of companies hit by the financial crash and directs 25% of its holdings into private equity deals – more than any UK pension fund.

In the past year it bid $5bn alongside TPG, one of the most aggressive US private equity firms, for IMS Health of Connecticut.

Buying Tomkins, which is described by several analysts as a bargain, would add to a growing list of major stakes in large corporations by Canadian pension funds.

The Ontario Teachers Pension Plan holds a 27% stake in Northumbrian Water and was rumoured earlier this year to be supportive of a full takeover. The latest speculation allies the Ontario fund with the Abu Dhabi Investment Authority to take the utility private.

In March the Ontario fund spent £389m buying the lottery operator Camelot after it beat private equity firm CVC in an auction.

The Canada Pension Plan is the equivalent of the UK's state second pension, formerly known as Serps, with one key difference. In the UK, national insurance contributions are used to pay current pensioners and the remainder is diverted into general government spending. The Canadians take the remainder and invest it.

The pension plan's investment board is a separate unit with a constitution that allows a wide range of holdings.

A focus on large, longer term purchases dates back to the 1990s when the fund decided its size warranted diversifying into lucrative private equity-style deals. Returns between 2004 and 2007 averaged more than 10%.

Some UK funds have attempted to mimic the success of the Canadian funds with increased support for private equity and hedge funds.

The University Superannuation Scheme, which provides an occupational retirement income for academics, has boosted so-called alternative investments to close an £8bn deficit.

But the culture of UK funds and many of the rules surrounding scheme funding have discouraged direct investment in companies. Until a few years ago most occupational schemes were more the 70% invested in equities with the remainder in cash, property and bonds.

The steep stock market decline of 2003 and accounting rules changes encouraged fund trustees to cut the risk of falls in value with a shift from shares to fixed income bonds.

Critics of UK funds argued the move, while it minimised the impact of declining stock markets and avoided the steep falls that hurt the Canadian funds, effectively locks them into low growth investments and prevents them from making strong gains in the future.