Employment cessation events—trustee decision-making process

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • Employment cessation events—trustee decision-making process
  • Background
  • Assessing impact of employment cessation event
  • Deciding how to deal with the section 75 debt
  • Step 1—decide whether the cessation employer's liability share should be paid in full
  • Step 2—if full payment is not necessary or possible, decide on an appropriate alternative
  • Step 3—decide whether additional mitigation is necessary
  • Deciding whether further action is required once section 75 debt has been dealt with
  • No double-counting
  • What is double-counting?
  • More...

Employment cessation events—trustee decision-making process


This Practice Note considers the issues which trustees of a multi-employer defined benefit (DB) pension scheme should consider where an employment cessation event occurs which triggers a section 75 debt.

An employment cessation event will occur where the participating employer of a multi-employer DB scheme ceases to have active members at a time when another participating employer in the scheme still has at least one active member.

On the occurrence of an employment cessation event, a statutory debt (known as a 'section 75 debt' or 'employer debt') is triggered under the Pensions Act 1995, ss 75-75A and the Occupational Pension Schemes (Employer Debt) Regulations 2005, SI 2005/678 (the Employer Debt Regulations) on that participating employer. The debt triggered is equal to the share of the scheme's full section 75 debt that is attributable to that employer. That share is referred to in legislation as the liability share.

For more information, see Practice Note: When is a section 75 debt triggered? and How to deal with a section 75 debt—an introduction.


The starting point is for any section 75 debt triggered to be paid in full to the scheme by the employer triggering the debt (referred to in this Practice Note as the 'cessation employer'). However, where the section 75 debt is

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