UK - The Pensions Regulator will be launching an investigation next year into proposed vehicles that could allow employers to abandon their occupational pension schemes.
The UK watchdog warned pension fund trustees of the new vehicles proposed by employers that could see them ducking out of their pension scheme obligations.
Chairman David Norgrove said the regulator was seeing transactions which aimed to remove the employer covenant.
Such transactions would seek to transfer schemes to new vehicles with a nominal employer. Therefore, the existing employer would avoid meeting its full obligations, explained chief executive Tony Hobman.
"Once the link to any employer is removed, the trustees will have lost an important backstop to protect scheme members if the pension fund runs into difficulties in the future."
At year end and again at the beginning of 2007, the regulator will be consulting to draw up a set of guidelines to help trustees deal with such proposals.
"Trustees must apply a high level of scrutiny to such deals," Norgrove said.
He noted trustees should recognise the importance of a viable in delivering pension scheme members' benefits. He also suggested they should take professional advice.
Johnson Controls International has appointed XPS Pensions as investment and actuarial adviser for two of its schemes, following a competitive tender process.
Merseyside Pension Fund has allocated an initial £400m of assets to a smart sustainability fund managed by State Street Global Advisors (SSGA).
This week's top stories included exclusive coverage of The Pensions Regulator's plans to require schemes to use professional trustees.
Buck has launched a solution to help pension schemes equalise guaranteed minimum pensions (GMPs) in a cost effective way with minimum hassle.