Sackers submits comments on Employer Debt consultation


Sacker & Partners LLP has responded to the Department for Work and Pensions (DWP) consultation on Employer Debt (Section 75 of the Pensions Act 1995), which closed today (19 November 2009).

The consultation includes new draft regulations which set out proposed easements to the existing employer debt provisions, for use when businesses restructure. If implemented, the proposals will result in further changes to The Occupational Pension Schemes (Employer Debt) Regulations 2005 (the “Employer Debt Regulations”), which were the subject of substantial amendments as recently as April 2008.

The proposals aim to reduce the circumstances in which a corporate restructuring (namely, an internal reorganisation) will trigger a debt in a defined benefit (DB) pension scheme, by means of a “general easement” and a “de minimis easement”.

Ian Cormican, partner, comments: “The DWP’s broad policy aim, that corporate activity should not be unnecessarily inhibited, is one which we support. However the narrow scope of the easements put forward in the consultation means they are likely to be of only very limited use in practice. Further, in order to take advantage of the easements, employers and trustees must comply with a very prescriptive set of requirements.”

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For more information

Ian Cormican

+ 44 (0)20 7615 9501