The concept of employer debt is one of the most critical and
fundamental elements of the UK's
defined benefit (DB) pension regime. Put simply, it is intended
to ensure that no employer is able to walk away from a pension
scheme without paying its fair share of the liabilities as they
stand at that time or, alternatively, providing adequate support or
mitigation in place of payment.
The employer debt regime is established and implemented through
section 75 of the Pensions Act 1995, together with corresponding
regulations. As a result, an employer's share of the
liabilities will often be described as its "section 75
debt". While the Pensions Regulator may intervene in some
cases, the enforcement and recovery of section 75 debts is first
and foremost the responsibility of the pension scheme
trustee.
