It was confirmed by the bank that it had agreed to separate itself from the scheme, leaving the lender exclusively responsible for its employees' retirement savings.
The Co-op Bank has agreed a £700m rescue deal with U.S. hedge fund investors that will see it continue as a stand-alone business.
The £700m will consist of a new equity raise from a group of existing shareholders totalling £250m and the sale of new shares which will generate £443m.
The lender, which is majority-owned by USA hedge funds, put itself up for sale in February but scrapped the plans in favour of raising capital from existing investors.
But the bank, which has four million customers, will keep the Co-op branding and confirmed it would continue to keep "values and ethics at its heart".
The cash will be stumped up by hedge funds and other investors, leaving the Co-op Group with just a 1% interest in the bank.
"It is a great outcome for our customers".
According to Sky News, Interritus Limited and Al Faisal Holding "held several rounds of talks" with Co-op Bank, however sources said there are "a series of significant hurdles to any deal being agreed". ― File picLONDON, June 28 ― Britain's Co-operative Bank said on today it had agreed a £700 million (RM3.8 billion) financial rescue package with leading investors that will shore up its capital base, ending months of uncertainty about its future.
"The proposal would also safeguard the Bank's values and ethics".
The mutual's stake had already fallen to 20% after previous rescue operations, the first of which was in 2013 when the scale of the problems in the bank were uncovered.
"Discussions with respect to the separation of the Co-operative Pension Scheme (Pace) into sections for which Co-operative Group and bank have respective responsibility are advanced", the bank said.