Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Debt definition

What does Debt mean? Debt, in pensions practice, is the sum an employer must pay to an occupational defined benefit pension scheme to meet any funding shortfall when the employer ceases to participate or the scheme winds up. In England & Wales and Scotland, this employer debt (commonly the section 75 debt) is a statutory liability under section 75 of the Pensions Act 1995 and the Occupational Pension Schemes (Employer Debt) Regulations 2005. It is typically calculated on a buy-out basis (the estimated cost of securing members’ benefits with an insurer) and becomes immediately due to the trustees on a trigger such as...

Compromising section 75 employer debts: Bradstock agreements, PPF+ compromises, criminal offences, contribution notices, PPF eligibility and notifiable events

Published by a LexisNexis Pensions expert

Practice notes

Employer debt legislation

Section 75 (and 75A) of the Pensions Act 1995 (PA 1995), together with the underlying legislation, collectively comprise what is commonly called the ‘employer debt legislation’. In broad terms, these provisions state that a statutory (non-priority) Debt arises in respect of an Employer (or employers) participating in a registered defined benefit occupational pension scheme when the scheme is in deficit on a buy-out basis and one of three trigger events occurs:

the scheme entering wind-up
an insolvency event (as defined for the purposes of the legislation) in relation to a participating employer
in a multi-employer scheme, a participating employer ceasing to employ active members while at least one other employer continues to do so (an ‘employment cessation event’)

The statutory debt created under PA 1995, s 75 (a ‘section 75 debt’ or ‘employer debt’) is owed by the relevant employer to the pension scheme, and is determined by reference to that employer’s proportion of the pension scheme’s deficit assessed on the buy-out basis...

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Wyn Derbyshire

gunnercooke LLP

Wyn is a partner at gunnercooke LLP and specialises in pensions, trust and employment law in all industry sectors, dealing with the transactional, advisory and documentation aspects.He also has wide experience of the pensions implications of heavyweight corporate transactions and flotations, the issues arising from the establishment and merger of pension schemes, and sex equalisation and other discrimination issues in respect of benefits provided by pension schemes. In addition, he provides advice to pension scheme trustees generally.Recent transactions include advising Amcor on pension matters relating to the acquisition of Alcan business and the acquisition of Northern Foods PLC by Boparan Holdings.He is a co-author (with Stephen Hardy and Stephen Maffey) of TUPE: Law and Practice, published by Spiramus Press (now in its 4th edition), and co-author (with Stephen Hardy and David Wicks) of Money & Work, published by Spiramus Press in August 2007. He has also...

Web page updated on 21/05/2026

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