24th April 2017 Jane Kola comments in Pensions Expert on the government’s Section 75 debt proposal
Experts have welcomed the government’s recent consultation proposing a new deferred debt arrangement for employers in multi-employer pension schemes, but concerns over complexity of employer debt regulation remain.
Jane Kola was sceptical about the proposals. She commented, “The conclusions of the consultation are sensible for the mischief they are seeking to address, but it doesn’t get away from the fundamental problem, which is that the legislation is flawed, poorly drafted and does not address the real needs of schemes and employers alike.”
She added further, “Employers should not be able to unfairly escape their liabilities, but they should also not be weakened or driven to insolvency because of promises made decades ago.”
Jane said that there are a number of conditions to ending a deferred debt arrangement “which make it commercially risky for an employer to enter into.”
“Those who have used the easement would find their s75 debt triggered, potentially with no warning. That could result in insolvency for them whilst the other employers would continue to pay their contributions over the long term.”
Read the full article in Pensions Expert here.
The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. ARC Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.