09 October 2006
The Pensions Regulator has warned employers not to cook up plans
to dump their pension schemes.
Companies have been warned they may be breaking the law if they
transfer their schemes to new employers without meeting their
financial obligations.
The regulator says it has seen a number of plans to do this
without making sure the pension scheme is properly funded.
Pension scheme trustees have been told to make sure employers do
not get away with it.
The regulator's chief executive Tony Hobman said: "We are
starting to see proposed corporate transactions involving schemes
where the primary intent behind the transaction is for the employer
to abandon the scheme.
"We do not consider that abandonment of a scheme by its
employers is usually likely to be in the best interests of scheme
members," he added.
He told trustees that they should apply an "extremely high level
of scrutiny" if any such plan came their way.
