Overview

Fewer employer debts under section 75 will be triggered on group restructurings following changes in the legislation from 6 April 2010. But the new exceptions only apply if tight conditions are met.

The exceptions are intended to make life easier for groups sponsoring multi-employer defined benefit pension schemes. The conditions are designed to protect members' benefits and to maintain the strength of the sponsors' covenant to the scheme.

An employer can trigger a s.75 debt by having an "employment-cessation event". Generally speaking, this is when it ceases to employ active members without being the last employer to do so – in other words, when its business is hived down to a subsidiary. Where one of the new exceptions applies, there is no "employment-cessation event" and so no debt. There is, however, a general exception and one for small-scale restructurings.

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