The Pension Protection Fund has moved to minimise the implications of an investigation that found £3.8bn worth of pensions assets had been offloaded to the lifeboat fund using "pre-pack" insolvency rules.
The investigation, conducted by FTAdviser's sister publication the Financial Times, found that 17 per cent of the 868 pension schemes currently in the PPF had been offloaded using these rules.
A pre-pack sale allows an insolvent firm to be sold as a going concern before an administrator is appointed.
In the cases investigated by the Financial Times, the companies shed their defined benefit pension schemes as part of pre-pack sale.
Yet-to-retire members of pension schemes that enter the PPF must take a 10 per cent cut to their benefits, along with an annual cap on how much may be received.
Parties quoted in the article questioned the necessity of shifting the pension scheme liabilities onto the PPF.
The PPF's head of restructuring Malcolm Weir, however, downplayed the implications of the use of pre-pack rules.
He said the lifeboat fund had been "educating insolvency practitioners on the need to engage before any pre-pack insolvency".
"A pre-pack insolvency may be entirely appropriate in the circumstances but this needs to be demonstrated," he said.
"The number has dropped significantly in the last few years and, while some cases have caused us concern, we do not believe there is an issue of widespread abuse of this mechanism."
He said the PPF had "strong controls" in place to take action "if a scheme comes to the PPF through a pre-pack insolvency without prior engagement or where we have concerns".
"In such circumstances we would alert The Pensions Regulator, who have a range of regulatory powers available to them, and can seek to protect the interests of our levy payers by appointing an independent liquidator," he said.
A spokesperson for The Pensions Regulator said: “While pre-pack administrations can be a useful tool for realising best value from failing businesses, we are alive to the risk of misuse, particularly when they involve sales of businesses to connected parties.
"Where we suspect that they have been misused, to the detriment of the pension scheme, we have strong anti-avoidance powers which we can and will use."
However Frank Field, chair of the Work and Pensions select committee, said the findings raised "real concerns about whether adequate protections are in place to prevent schemes being dumped on the PPF, at cost to pensioners and levy-payers".
He added: "We intend to pursue these issues further as part of our ongoing work on DB pensions."
The investigation came just over a month after Sir Philip agreed to pay up to £363m into a new pension scheme for BHS employees - a move which will see most members come out of the PPF.
It also comes as the government consults on a range of potential reforms to the DB sector to prevent more schemes falling into the PPF.
james.fernyhough@ft.com
