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Invensys is first firm to lock up pension

Invensys, the blue-chip engineering group which is expected to fall out of the FTSE 100 this week, has become the first employer to lock final-salary members into its underfunded pension scheme.

It is using Opra&#39s decision to allow schemes to defer transfers until new rules come in that will allow lower valuations, as reported in Money Marketing.

Alan Pickering says Opra&#39s move is consistent with the proactive approach he wants from the new kind of regulator first proposed in his report and now under consultation.

Scottish Equitable pensions development director Stewart Ritchie says concerns over funding levels mean the process for considering a transfer should now include an assessment of the final strength of schemes and sponsoring employers.

He says: “Some schemes just will not come back from an underfunded position. People may think it is worth waiting around until the scheme becomes fully funded again but people said that about Equitable Life. The transfer analysis should contain additional questions about the financial strength of the fund and employer.”

Dennehy Weller managing director Brian Dennehy says: “IFAs need guidance on this issue. It is ironic that just when the pension misselling saga is coming to a close, the advice we were supposed to have given – to go into final-salary schemes – was not always as sound as people thought.”

Invensys spokesman Duncan Bonfield says: “The company will do whatever the trustees recommend.”

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