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...

Section 75 employer debts in defined benefit schemes: triggers, calculation, ECEs, grace periods, frozen schemes, apportionment/withdrawal and deferred debt arrangements, transfer deductions and restructurings: guide for junior pensions lawyers

Published by a LexisNexis Pensions expert

Practice notes

This guide is chiefly for trainees, newly qualified lawyers and anyone unfamiliar with pensions law. A key area is the legislation on section 75 debts (also referred to as employer debts or statutory debts), which is found mainly in:

sections 75–75A of the Pensions Act 1995; and
supporting regulations, in particular the Occupational Pension Schemes (Employer Debt) Regulations 2005, SI 2005/678 (the employer debt regulations)

The employer debt regime primarily concerns employers participating in defined benefit (DB) occupational pension schemes. In very limited cases it can extend to defined contribution (DC) schemes, although those scenarios are not covered in this note. Broadly, the rules allow a non‑priority liability to arise, owed by an employer (or multiple employers) to an underfunded DB scheme, when a ‘section 75 triggering event’ occurs.

Triggering events

There are three triggering events:

when an employer participating in a DB scheme experiences an ‘insolvency event’, or when the trustees of the pension scheme make an application for admission to the Pension Protection Fund (PPF) (or the

...

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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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