Govt seeks views on debt rules for multi-employer pension schemes

The government is seeking views on the operation of the employer debt regime for non-associated multi-employer pension schemes.

Many charities are members of NAME schemes, which see a number of employers pool pension assets and share risk using a third party.

At present, a number of events can cause an employer in a NAME scheme to be required to pay its share of the total difference between the value of the assets and the amount of the liabilities of the scheme.

‘Section 75’ debt can be triggered by an employer becoming insolvent, or if it ceases to employ any active members in the scheme.

However, in a consultation the DWP said a number of stakeholders have raised concerns that the requirement to pay Section 75 debt where no active scheme members remain employed is overly onerous, and the easements in place for this debt are not sufficient.

On the other hand, the department said others argue the employer debt regime is “extremely important in preserving scheme stability and should not be amended in any way”.

“We are therefore seeking views and evidence about the operation of the current employer debt regime for non-associated multi-employer schemes, the effectiveness of the current easements open to employers in such schemes, and the possible impacts of changes to the regime that have been suggested to us by stakeholders.”

The DWP stressed it is not making any proposals at this stage, but is merely seeking views.

Access the consultation here.

    Share Story:

Recent Stories

BANNER

Charity Times Awards 2023

How is the food and agricultural crisis affecting charity investment portfolios?
Charity Times editor, Lauren Weymouth, is joined by Jeneiv Shah, portfolio manager at Sarasin & Partners to discuss how the current pressures placed on agriculture and the wider food system is affecting charity investment portfolios.