Company pension fund trustees have been put on alert for moves by employers to dump their liabilities.
The Pensions Regulator is to investigate deals that could lead to pension schemes being switched to companies without the financial resources to fund them, it was announced yesterday.
Soaring liabilities have seen many final salary schemes - once the gold standard of the pensions industry - closed to new members in recent years. Companies that want to move to the next step and wind up their funds are obliged under Section 75 of the Pensions Act 1995 to meet the cost of transferring liabilities to pension companies on a fully funded basis.
But fears are growing that some companies are now trying to shunt funds on to associated companies without the funds to meet Section 75 liabilities.
The Pensions Regulator is now calling on trustees to scrutinise any deals that could see companies transfer their pension scheme to such a company.
Tony Hobman, chief executive of the Pensions Regulator, said: "Trustees should apply a high level of scrutiny to any such transactions which are brought to them.
"And they must presume from the start that it is unlikely to be in the best interests of their members to break the link with an employer of substance, except by paying the cost of buying out the benefits with a regulated insurance company.
"Once the link to any employer is removed the trustee will have lost an important backdrop to protect scheme members if the pension fund runs into difficulties in the future."
The regulator announced that it is planning to consult on the issue at the end of this year or early next year. It will also look at the guidance given to trustees in relation to corporate transactions.
Fewer than five examples of employers proposing to abandon schemes in this way have come to the regulator's notice. But pensions commentators believe the fact that such a warning has been issued suggests the problem could grow.