Jurisdiction(s):
United Kingdom

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...

LMA secondary debt trading: completing Bank Debt, Claims and Risk Participation confirmations, key elections and RFR-based updates

Published by a LexisNexis Banking & Finance expert

Practice notes

STOP PRESS:

The Loan Market Association (LMA) has issued refreshed editions of the standard terms and conditions for par and Distressed Trade Transactions, the complete set of Funded Participation and Risk Participation Agreements, and the Secondary debt Trading documentation User Guide, all coming into force on 17 March 2026. The revisions cover the deletion of LIBOR references, updates to IBOR rate definitions and the Target2 definition, plus refreshed ERISA representations that incorporate further exemptions to the prohibited transaction rules under ERISA and the US Internal Revenue Code. Access to the new documents is restricted to LMA members via the LMA’s Documentation Hub.

Most secondary debt trades are arranged over the phone or by email. After the trade call or email dialogue, the counterparties set out the agreed trade terms in a trade confirmation. For additional detail, see Practice Note: Secondary debt trading—timeline of a typical trade. That Practice Note proceeds on the basis that the participants in the secondary debt trade have elected to document the trade using the Loan Market Association (LMA) suite of recommended documentation for secondary debt trading, which also contains recommended forms of trade confirmations. For further information, see Practice Note: Overview of the key documentation and process...

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Web page updated on 21/05/2026

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