THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL Defined benefit PENSION SCHEMES THAT ARE SUBJECT TO THE Employer debt REQUIREMENTS

Corporate restructurings can frequently give rise to an employment cessation event, for example, where transfers of employees between group companies or significant redundancies take place as part of the exercise. An employer debt under section 75 of the Pensions Act 1995 can therefore be triggered, which could defeat the purpose of the group reorganisation (invariably to save money for the group and/or to improve its financial sustainability).

For more information on ‘employment cessation events’, see Practice Note: When is a section 75 debt triggered? — An employment cessation event occurs in a multi-employer scheme

Two Easements from the employer debt requirements were introduced in April 2010 under the Occupational Pension Schemes (Employer Debt and Miscellaneous Amendments) Regulations 2010, SI 2010/725:

1. •

   the general easement

2. •

   the De minimis easement

Both easements are available to employers undertaking group restructuring exercises.

If a corporate restructuring qualifies for either easement, it will not constitute