How to deal with a section 75 debt—an introduction
How to deal with a section 75 debt—an introduction

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

  • How to deal with a section 75 debt—an introduction
  • Recognising that a section 75 debt has been (or will be) triggered
  • How to deal with a section 75 debt
  • Paying the section 75 debt in full
  • Deferred debt arrangements
  • Apportionment arrangements
  • Withdrawal arrangements
  • Relevant transfer deductions
  • Clearance
  • Notifiable events
  • more

THIS PRACTICE NOTE APPLIES IN RELATION TO DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES

This Practice Note looks at the alternative methods available to deal with a section 75 debt, particularly in a multi-employer scheme. This Practice Note also covers any clearance and notifiable event issues that may arise.

For considerations specific to scheme trustees when deciding how a section 75 debt should be dealt with on an employment cessation event, see Practice Note: Employment cessation events—trustee decision-making process.

For considerations specific to a section 75 debt triggered in the context of a transaction, see Practice Note: How to deal with a section 75 debt on a corporate transaction.

For considerations specific to section 75 debts triggered in the context of a group reorganisation, see Practice Note: Intra-group reorganisations and pensions.

Recognising that a section 75 debt has been (or will be) triggered

Section 75 debt triggers

A section 75 debt (known as an 'employer debt') may become due from the employer of a defined benefit occupational pension scheme where:

  1. the scheme is a multi-employer scheme and an employment cessation event occurs in relation to that employer (referred to in this Practice Note as a 'cessation employer')—an employment cessation event occurs where the cessation employer ceases to have active members in the scheme at a time when one other participating employer in the scheme