Watchdogs yesterday took the unprecedented step of intervening to safeguard the pensions of 62,000 people in the old GEC pension fund.

The Pensions Regulator announced that it was using special powers to install quickly three independent trustees on the board of the £3 billion Telent pension fund.

The existing trustees sought help from the regulator after Telent, a telecoms equipment maker which is all that remains from the once mighty GEC industrial empire, agreed to be taken over by a special purpose vehicle backed by Pensions Corporation (PC), which bids for companies with big pension schemes in the hope of seizing control of the schemes and running them more efficiently.

The intervention leaves the three new trustees in sole charge of decision-making at the fund for the next six months and prevents PC taking control of the trustee company.

The unusual intervention could constitute a major setback for PC, whose main aim with the bid was to take control of the pension fund. It was not clear last night whether it could or would want to back out of the takeover.

The regulator has for the first time used its powers under the Pensions Act 2004, which allows it to appoint independent trustees without first issuing a warning notice.

Chris Holden, chairman of the trustees, asked the regulator for help after unsatisfactory discussions with PC. “We wanted the strategy of the plan to remain independent from the sponsor. We were concerned it might not be,” he told The Times.

Co-Investment Number 5 LP, a Guernsey-based partnership backed by PC, last month bid £398 million for Telent and has now acquired 29 per cent of the shares. The first closing date for the offer is next week. Telent said last night: “This comes as a surprise to us. We’ll be approaching the Pensions Regulator to see what this means and what happens now.”

The pension fund is in good shape, with no significant deficit and with access to a ringfenced £514 million put into escrow when Telent sold its main business to Ericsson.

Jonathan Seres, a partner of Sacker & Partners, adviser to the pension trustees, said the appointment of independent trustees was timely. “It shows that the regulator will not watch from the wings when there is concern that a pension scheme may be at risk.”

PC, which is backed by HBOS, RBS and JC Flowers, had no immediate comment.

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