Multi-employer pension schemes: options for dealing with statutory debts

Section 75 of the Pensions Act 1995 forms part of the statutory scheme funding regime. It imposes a debt (a "Section 75 Debt"), payable to the pension scheme, on employers (and former employers) of a defined benefit pension scheme if certain trigger events occur, notably when an employer withdraws from an on-going multi-employer scheme as a result of a corporate transaction or restructuring. This debt is calculated by reference to the cost of securing benefits on a buy-out basis.

There are, however, various alternative methods of calculating and dealing with Section 75 Debts and this note provides an overview of the rules and the options for trustees and employers.

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