The following Pensions guidance note provides comprehensive and up to date legal information covering:
THIS PRACTICE NOTE APPLIES TO SCHEMES THAT WERE CONTRACTED-OUT SALARY-RELATED (COSR) SCHEMES BEFORE 6 APRIL 2016
This Practice Note covers the requirements that an employer wishing to contract-out on a salary-related basis (also known as DB contracting-out) had to comply with in order to obtain a contracting-out certificate before the abolition of DB contracting-out on 6 April 2016.
For more information on the abolition of DB contracting-out, see Practice Note: Abolition of DB contracting-out—an introduction.
Most contracting-out certificates were issued in respect of a single employer (individual contracting-out certificates).
However, where the scheme was a multi-employer scheme, a contracting-out certificate could in certain circumstances be issued in relation to more than one employer. Such certificates were known as 'holding company contracting-out certificates'.
A holding company contracting-out certificate could be issued even if the holding company was not itself contracted-out. It was sufficient that:
the scheme was a multi-employer scheme
the employers in the scheme were either:
associated by a common interest, ie they shared the same management, shareholders, employees or business operations, or
corporate bodies that were part of the same group of companies, consisting of a holding company and one or more subsidiaries.
While the terms 'holding company' and 'subsidiaries' were defined by the Companies Act 2006, s 1159, it was possible to treat:
a principal employer
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