A second employer has been appointed to stabilise the National Institute of Agricultural Botany (NIAB) pension scheme after intervention from The Pensions Regulator (TPR) when trustees failed to agree a valuation in 2015.
TPR said the scheme was now in a "much stronger position" after "months of settlement discussions".
The regulator said it had considered using its anti-avoidance powers where the scheme was at risk as a result of a historic organisational restructure when the NIAB was privatised in 1996 and split into two in 1998.
NIAB and NIAB Trust were originally part of one entity, but a liabilities and operations transfer saw NIAB take sole statutory employer of the pension scheme from the entity - also called the National Institute of Agricultural Botany (the Institute) - after 1998.
TPR said the scheme came into danger when NIAB Trust - a registered charity created with responsibility for NIAB's land, building, and valuable assets - had valuable land assets and liabilities, including the scheme, separated.
Statutory employer NIAB had a low net asset value of £3.7m at the end of the 2016/17 financial year, while net assets for NIAB Trust at the same date totalled £50.5m. This included assets inherited from the Institute, which before 1998 would have been available to meet its liabilities, including the pension scheme.
TPR said the scheme trustees then attempted to secure formal support from NIAB Trust but were unsuccessful, resulting in a failure to agree the 2015 funding valuation. Trustees concluded the covenant of NIAB was unable to financially support the scheme.
The regulator then began an investigation in June 2018 into whether it would be appropriate to issue a financial support direction (FSD) against NIAB Trust.
An FSD requires a firm to set out to the regulator and the scheme how it will provide financial support, although it does not mandate any particular path.
A warning notice was subsequently issued to NIAB Trust with TPR successfully seeking an FSD to protect the scheme's position. An agreement last December saw NIAB Trust, the trustees, and the regulator agree a settlement which saw NIAB Trust become the statutory employer to the scheme, sharing responsibility for full scheme deficit with NIAB.
TPR said: "As NIAB Trust is a charity, it must balance its charitable objectives with its other responsibilities. The flexibility of the settlement allows it to provide legally binding, long-term support to the scheme and its members.
"As part of the negotiations, the trustees have also agreed both the 2015 and 2018 valuations which see both NIAB and NIAB Trust taking joint responsibility for the deficit repair contributions due as part of the recovery plan."
The regulator said the "meaningful settlement discussions" between the parties to resolve the issues, albeit time consuming, reflected that the use formal powers is nonessential.
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