Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Defined benefit definition

What does Defined benefit mean? In legal practice, defined benefit (DB) refers to occupational pension benefits fixed by a formula—commonly based on pensionable salary (final salary or career average) and length of service—rather than by the amount of contributions paid or investment performance. The term is used and recognised in UK pensions legislation (including the Pensions Acts and related regulations) and in Ireland (Pensions Act 1990), with broadly consistent usage across England & Wales, Scotland, Northern Ireland and Ireland. Key features include: the sponsoring employer bears the funding and investment risk; trustees obtain regular actuarial valuations; and any deficit must be addressed through...

Statutory employer status in defined benefit occupational pension schemes: principal employer substitutions (single- and multi-employer), scheme mergers, DC employers, and section 75/PPF consequences

Published by a LexisNexis Pensions expert

Practice notes

THIS PRACTICE NOTE APPLIES IN RELATION TO defined benefit OCCUPATIONAL PENSION SCHEMES

A scheme’s statutory employer is the employer legally accountable for:

achieving the scheme‑specific funding target
settling any section 75 liability arising in connection with the scheme
initiating entry to a pension protection fund (ppf) assessment period

In certain situations there can be uncertainty about whether an employer is, or is not, a statutory employer, and in cases there is a risk a scheme could be left without any statutory employers:

where the principal employer of a defined benefit (DB) arrangement is replaced by a new principal employer
during a scheme amalgamation
where a scheme’s employer is a defined contribution (DC) employer with responsibility solely for DC members

This Practice Note explores these three topics in depth, considering each in detail.

Meaning of statutory employer

The Practice Note Who is the statutory employer? examines the legislative meanings of statutory employer, the Pensions Regulator’s approach to statutory employers, and the steps to take to identify a scheme’s statutory employer(s). To capture the essentials briefly, the key points are summarised here.

Importance of identifying statutory employers

Since November 2011, scheme trustees have been required to disclose the identity of their statutory...

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Web page updated on 21/05/2026

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