Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Flexible apportionment arrangements definition

What does Flexible apportionment arrangements mean? In UK pensions practice, a flexible apportionment arrangement (FAA) is a statutory method for reallocating all or part of the section 75 employer debt from one participating employer in a multi-employer defined benefit pension scheme to another employer, so that a restructuring or exiting employer does not have to pay the debt immediately. FAAs are set out in the Occupational Pension Schemes (Employer Debt) Regulations 2005, as amended in October 2011, and are used by trustees and employers to manage section 75 liabilities in corporate reorganisations and M&A. Key features include: the agreement of the ceding and receiving...

Flexible apportionment arrangements in multi‑employer defined benefit schemes: avoiding or reducing section 75 debts—features, conditions, funding test, timing, trustee costs, notifiable events and clearance

Published by a LexisNexis Pensions expert

Practice notes

THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL defined benefit PENSION SCHEMES THAT ARE SUBJECT TO employer debt REQUIREMENTS

Since 27 January 2012, it has been open to parties to implement a flexible apportionment arrangement in order to:

avoid triggering an employer debt under the Pensions Act 1995, s 75 altogether (for further information on s 75 debts (also known as employer debts), see Practice Note: When is a section 75 debt triggered?), or
reduce the amount that may become payable if an employer leaves a multi-employer scheme (or otherwise ceases to employ active members)

flexible apportionment arrangements do not replace other mechanisms for dealing with an employer debt, eg scheme apportionment arrangements or the corporate restructuring easements, and cannot be used where the scheme has entered insolvency or winding up.

Introduced chiefly to assist where several employers cease to employ active members in the same scheme at broadly the same time in corporate restructuring scenarios, their use is generally preferred to the corporate restructuring easements, which are more prescriptive. For further information on scheme apportionment arrangements, see Practice Note: Apportionment arrangements — Scheme apportionment arrangements...

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Chris Ransom

CMS

Chris is an associate in the CMS Pensions team. With over two years' experience, he advises a mix of employer, public sector and trustee clients on a broad range of advisory pensions issues. These include trustee and employer duties, automatic enrolment, amending scheme documentation and moral hazard/scheme funding issues. Chris' recent work has a particular focus on benefit redesign and liability management exercises. Following a six month secondment with the Pension Protection Fund, Chris also has a detailed working knowledge of the PPF levy, entry and compensation framework. Chris is a member of the Association of Pension Lawyers and is also a contributor to CMS's Pensions Law Handbook. ...

Web page updated on 21/05/2026

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