Last week Lonmin, the mining company, became the first FTSE-100 company to offload its final-salary liabilities to Paternoster, one of the new breed of pension “buy-out” firms.

A couple of days later Friends Provident, itself a pension company, transferred responsibility for 3,200 of its former employees' final-salary pensions to rival Norwich Union in a £350m deal.

One in 10 FTSE-100 companies has now sought quotes on the cost of outsourcing their pension liabilities to a third party insurer, according to actuary Lane Clark & Peacock.

You could be forgiven for thinking this new trend, a process called “bulk buyout”, sounds like the latest stage in the decade-long erosion of workplace pensions. However, experts said the security of your pension could in fact rise rather than fall.

Clive Wellsteed at Lane Clark & Peacock, said: “Insurance companies must hold much higher reserves than pension schemes, which is great news for the security of members' pensions.”

Eddie Titcomb, a retired company secretary from Buckinghamshire, was a member of the scheme at Lasmo, the oil-exploration firm, when its benefits were bought out by Paternoster.

“I was happy that the scheme was bought out because it meant that the scheme was fully funded,” he said.

There are still 3.4m active members of final-salary plans. Of those, 2.3m are in schemes closed to new members. Another 5.1m are drawing final-salary pensions. There are also 5m members of money-purchase, or defined contribution, schemes.

We answer your questions.

What is a buyout?

With a full buyout, the pension trustees transfer all the risk of the pension scheme to an insurance company, usually followed by the pension scheme winding up and ceasing to exist. Each member gets his or her own policy with the insurance company.

Why does my company want to sell the fund?

Final-salary schemes, where your pension is based on final earnings and the employer takes all the risk of it being underfunded, have become too expensive. The deficits on some company pensions are enormous. For example, British Airways had a pension deficit of £1.3billion at the end of March, which was almost half the airline's value.

Why might it be good?

Schemes are better funded after being bought out because at the time of transfer, the insurer is required to pay in to make sure all the liabilities can be met when due. Discretionary benefits, such as early retirement due to disability, will usually still be paid out because trustees typically make this a condition of transfer.

Couldn't the firm go bust?

Yes, so scheme members will be relieved to hear they get greater protection if the insurer collapses than they would if their employer became insolvent.

Pension benefits that have been bought out are protected by the Financial Services Compensation Scheme (FSCS). This provides greater compensation than the Pensions Protection Fund for employers' schemes.

The PPF promises to guarantee 100% of pensions in payment and 90% of those to be paid, up to a maximum of £27,771 a year. The FSCS compensates 90% of the value of a pension regardless of size. Unlike the PPF, increases to protect against inflation are covered.

There are a few cases where the PPF is better, such as where a pensioner's original pension scheme did not offer any inflation increases. They would get 100% of non-increasing pension from the PPF, but 90% of a non-indexed pension from the FSCS.

Times Recommends

• How to sell your home in a downturn
• How to boost your spending power
• Unemployment benefits explained