Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Employer debt definition

What does Employer debt mean? employer debt describes the sum a participating employer can become liable to pay to a defined benefit (DB) occupational pension scheme to cover a funding shortfall assessed on a buy‑out basis. In the UK, it is a statutory liability — the “section 75 debt” or “debt on the employer” — set by the Pensions Act 1995, ss 75–75A and the Occupational Pension Schemes (Employer Debt) Regulations 2005 (as amended) (with equivalent Northern Ireland legislation). It is typically triggered on scheme wind‑up, employer insolvency, an employment‑cessation event (where an employer ceases to employ active members in a multi‑employer...

Calculating section 75 employer debts in defined benefit schemes: responsibilities, single- and multi-employer apportionment, valuation dates, expenses and challenges

Published by a LexisNexis Pensions expert

Practice notes

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

Under sections 75 and 75A of the Pensions Act 1995 (PA 1995), a statutory employer connected with a defined benefit occupational pension scheme must meet any deficit in the scheme’s funding upon the occurrence of certain events. A liability arising under them is known as a ‘section 75 debt’ or ‘employer debt’. The detailed operation of sections 75 and 75A is prescribed by the Occupational Pension Schemes (Employer Debt) Regulations 2005, SI 2005/678 (the employer debt regulations), while the Occupational Pension Schemes (Deficiency on winding up etc) Regulations 1996, SI 1996/3128 can also be pertinent (see Calculating the section 75 debt: single-employer schemes, below). These statutory obligations concern funding deficits at key trigger points within schemes as above. For more on section 75 debts and events that can trigger them, see Practice Note: When is a section 75 debt triggered? Who is responsible for calculating the section 75 debt?...

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Laura Brook

Eversheds Sutherland

Laura is a partner in Eversheds Sutherland's London pensions team. Laura joined Eversheds Sutherland in 2006 and qualified as a solicitor in 2008. She advises trustees and corporate clients on all aspects of pensions law.Her experience includes advising trustees and employers in relation to scheme mergers following company restructurings and post-merger rule consolidations; advice on pension scheme governance; acting for employers and trustees in relation to scheme funding negotiations and assisting with parent company guarantees and other security documents; advising employers and trustees in relation to scheme change and consultation exercises; providing corporate support and advice in relation to the pensions aspects of share and business sales, including advice in relation to employer debt legislation, anti-avoidance legislation and clearance; and providing training in respect of key pensions legislation and proposed or recent changes....

Richard Evans

Herbert Smith Freehills Kramer

Richard is a Professional Support Lawyer in Herbert Smith Freehills' pensions group. He has worked as a pensions lawyer for more than 30 years. For most of that time was a partner at another major firm, where he was the lead adviser to various household-name pension schemes. Richard is a Fellow of the Pensions Management Institute and a member of the Association of Pensions Lawyers. He sits on Lexis PSL's Pensions Consulting Editorial Board, and on the Society of Pensions Professionals' Legislation Committee. He has spoken at various industry conferences and seminars....

Web page updated on 21/05/2026

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