Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Sponsoring employer definition

What does Sponsoring employer mean? In pensions practice, a sponsoring employer is the employer (or one of several employers) whose workforce an occupational pension scheme covers and for whom it provides, or could provide, benefits. The term is descriptive rather than a defined statutory label. UK pensions legislation more often uses employer in relation to the scheme, scheme employer or statutory employer (for example under the Pensions Act 2004 and section 75 of the Pensions Act 1995). Irish law generally refers to employer in the Pensions Act 1990. Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland. Key features and practical significance: -...

UK tax deductibility and timing of Pensions Act 1995 section 75 employer debts in defined benefit occupational pension schemes: spreading, apportionment/withdrawal, investment company rules, and subsidiary disposals

Published by a LexisNexis Pensions expert

Practice notes

This practice note concerns defined benefit occupational pension schemes.

What is a section 75 debt?

Sections 75 and 75A of the Pensions Act 1995 aim to ensure defined benefit occupational pension schemes are properly funded on wind-up, or when the sponsoring employer goes into liquidation. In a multi-employer arrangement, a liability also arises for any employer that stops employing active members while another employer still has at least one active member (an ‘employment cessation event’), even though neither the scheme nor the exiting employer is being wound up.

For further detail on when section 75 debts arise and how they are assessed, see the following Practice Notes:

How to deal with a section 75 debt—an introduction
When is a section 75 debt triggered?
Calculating a section 75 debt

What is the tax treatment of a section 75 debt?

When a section 75 debt is payable, the key tax question is whether the payer can claim a tax deduction. Put another way, is the payment an allowable expense that reduces the payer’s...

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Patrick Ford

Squire Patton Boggs

Patrick Ford's expertise covers advising on the tax implications of corporate finance and property transactions as well as tax structuring opportunities in connection with such transactions and corporate restructuring generally. Patrick has varied experience of employee incentive work and has drafted documentation for, implemented and advised on the operation of a wide range of equity based employee incentive arrangements. He also has extensive experience of advising on employment and pensions tax related issues. Patrick was ranked the top tax lawyer in the north west of England in Chambers UK 2014 and Chambers UK 2015, with comments including that "he has the pulse and understands how tax works - you think to yourself, 'he's a find'" and "he provided fantastic support on complex tax issues. He was extremely responsive to our deadlines and got to understand our ways of working very...

Ian Cochrane

Isio Group Limited

Ian has been at the forefront of the development of Asset Backed Contribution arrangements for over 15 years. He combines his accounting and tax knowledge with extensive pensions and commercial experience to design and implement bespoke funding solutions for clients....

Web page updated on 21/05/2026

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