Overview

The Government is proposing a new easement under the employer debt regulations, to be known as "flexible apportionment arrangements". These are specifically designed to help a corporate group avoid a "section 75" debt being triggered when a group company participating in a multi-employer defined benefit pension scheme ceases to employ active members as part of a group reorganisation or restructuring.

The new arrangements, which also include the option of an extended grace period, may also be helpful in other situations where a scheme employer loses its last active member. In particular, flexible apportionment arrangements could be used on the disposal of a group company or its business to an outside buyer. But, as drafted, the proposed amendments will not allow flexible apportionment arrangements in schemes where defined benefit accrual has ceased.