The Pensions Ombudsman has ruled against a complainant who argued part of his pension should be classified as defined contribution to protect it from Pension Protection Fund reductions.
WM Marshall accepted a severance payment of £320,000 into his salary-related pension from employer Grampian Country Foods Group when he left the company in 1998.
However, Grampian hit financial difficulties in 2006 and three of its pension schemes were in deficit.
The Grampian scheme, of which Marshall was a member, was put into the PPF and Marshall's benefits fell from £70,157 per year to £26,050 per year.
Marshall attempted to claim that there had been an understanding his £320,000 severance payment had been ring-fenced in the scheme as a DC pot, rather than an addition to the final salary benefits he had accrued.
If his claim had been successful, the £320,000 pot would not have been subject to PPF reductions as the PPF only covers final salary benefits.
However, the ombudsman ruled that Marshall's financial advisers, McHardy and Burnett, had only made provision to protect the £320,000 payment from reductions in the event of his death or in case it was not used for the agreed benefits in addition to his normal retirement.
The advice firm had not protected it in the event of the scheme winding up, the ombudsman said.
"Nothing was done to give the £320,000 any protection on winding up," the ombudsman ruled.
"So under the deed and rules, if the scheme had wound up in deficit the £320,000 would have fallen into the fund."
Naborro partner Anne-Marie Winton said Marshall had put forward an "opportunistic argument".
"It is not uncommon to have large amounts paid into a pension fund, and Marshall was trying to claw back money he had paid in," she said.
Winton warned top executives to be sure of the conditions under which they pay large amounts to their pension funds and ensure they have been ring-fenced correctly.
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