By Bob Howard
BBC Radio 4's Money Box
A major UK company has got permission to walk away from most of its pension deficit without going bust and handing it over to the Pension Protection Fund.
The scheme had been struggling with a deficit of about £250m
TH Global - formerly Kvaerner plc - will pay in less than half the fund's shortfall over the next six years.
It intends to make up the rest with a daring investment strategy.
The Pensions Regulator has cleared the plan.
Kvaerner plc's management bought out the company for just £1 last year and renamed it TH Global.
The 2004 Pensions Act was partly created to ensure companies trying to do that would have to pay off any deficit in full.
But speaking to BBC Radio 4's Money Box, pensions expert John Ralfe said in this instance that doesn't appear to be the case.
"It looks like the first occasion on which the Pensions Regulator has allowed a company to walk away from its pension scheme without fully funding it," he said.
"It looks like the Pensions Regulator has let the company off the hook."
The strategy involves putting a quarter of the investments into hedge funds and private equity.
The alternative would be for the company to go bust and apply to the government's Pension Protection Fund (PPF) which was set up to safeguard schemes when a company goes under.
When the PPF steps in, pensioners get a pension, but a smaller one than they would have got from the company.
John Ralfe believes not only are the trustees embarking on a risky investment strategy, he also fears pensioners may not be able to turn to the PPF if things go wrong.
Mike Street, a Kvaerner pensioner is also concerned: "The trustees will have to adopt a high risk strategy.
"If it fails, we want to be absolutely sure that the pension trust will still be eligible for entry into the Pension Protection Fund."
The case has turned into a major battle between pensions experts.
Mr Ralfe is urging a cautious approach to pension investments whilst Ros Altmann - who advised the Kvaerner trustees - thinks the present state of the stock market means fund managers have to go for new and so far untried methods.
Ros Altmann said all trustees have to look at new ways of investing
They are bitterly divided over whether the Pension Protection Fund can take over the reigns if the investment strategy fails.
The trustees say they have received legal advice which confirms they will not be barred from the right to apply for help.
Ros Altmann said all trustees have got to look at new ways of investing if they want workers to be able to draw their full pension entitlement:
"The choice is between going into the PPF now, which is not what the members want. The alternative is to get some money into the scheme if you can and then modernise your investment strategy."
Ms Altmann said the scheme has taken out insurance to ensure the deficit does not get any bigger, but pension fund members are still contacting their MPs to seek clarification.
None of the bodies involved are willing to give interviews regarding the details of the deal or the underlying principles.
That has led some members to complain of an agreement surrounded by secrecy.
Conservative pensions spokesman Nigel Waterson is seeking clarification on behalf of one of his constituents.
"There's too much secrecy and mystery surrounding the details and it would certainly help if we could understand on what basis this is being done," he said.
The regulator says it is bound by the 2004 Pensions Act not to speak about the details of individual cases.
Some MPs are now calling for that to be changed.
Until this happens, Kvaerner pensioners like Mike Street will continue to feel they are being kept in the dark.
BBC Radio 4's Money Box was broadcast on Saturday, 8 July, at 1204 BST and was repeated on Sunday, 9 July, at 2102 BST.