Concerns about failed retailer BHS's pension funds were flagged up as early as 2012, a group of MPs have been told.
The chief executive of the Pension Protection Fund (PPF), Alan Rubenstein, said concerns were raised over the use of a subsidiary of Sir Philip Green's Arcadia Group to guarantee a £200 million shortfall in the pension scheme, as the PPF believed it was "incapable" of providing a guarantee on that scale.
The Government's Insolvency Service has launched a probe into how the nearly 90-year-old high street chain fell into administration last month, leaving a £571 million pension fund black hole.
An investigation has also been launched by the House of Commons business and work and pensions committees, which will grill billionaire Sir Philip on June 15 over his management of the pension scheme and demand explanations over a £400 million dividend payment made to his family from the business before he sold it to Retail Acquisitions for £1 in 2015.
Mr Rubenstein told the committees that existing BHS pensioners would continue to receive 100% of their benefits, while others due to receive pensions in future will get 90% of their expected pensions - with the exception of around 10 higher-paid staff, who will be subject to a cap.
The total liability to the PPF was estimated at £275 million, but Mr Rubenstein assured MPs that this support can be delivered without increasing the annual levy paid by solvent pension schemes to fund his organisation.
The committees heard that Arcadia subsidiary Davenbush was used for one year to guarantee the BHS fund, thus earning it a discount on its PPF levy. But this arrangement ended after the PPF raised concerns.
A year later, a new recovery plan for the BHS scheme was put forward, which envisaged increasing the period for dealing with the shortfall from 12 to 23 years - a period which Mr Rubenstein accepted was "exceptionally" long and Pensions Regulator chief executive Lesley Titcomb described as "very atypical".
Ms Titcomb said the regulator had "engaged" with the BHS fund over its intentions, and had not signed off on the plan by March 2015, when it learnt from news reports that the company had been sold for a pound.
She said the Pensions Regulator immediately launched an anti-avoidance investigation, which would include a probe into "whether any of the parties connected to this had walked away from their responsibilities".
The regulator came under fire from Conservative Business, Innovation and Skills Committee member Richard Fuller, who told Ms Titcomb: "You took 17 months to receive a plan. That plan had a 23-year recovery period, which sounds like it is twice the average, and your response was to 'Open a recovery plan case'.
"The fund had a £200 million deficit and growing, but you did not think it required 'proactive response'.
"And when you go after someone who has a fund which doesn't have enough money in it, your first question is 'How much can you afford?' You are not much of a regulator, are you?"
Ms Titcomb responded: "I don't agree with that statement. We have to, as a regulator, operate within the framework provided to us."
Work and Pensions Committee chairman Frank Field said: "Nobody seems to have blown the whistle."