One of the biggest practical challenges for a business that sponsors a defined benefit pension scheme is the risk of inadvertently triggering a due debt.
Simple business and restructuring activities such as individuals retiring or leaving can give rise to an immediate debt due under section 75 of the Pensions Act 1995, calculated on the highly costly ‘buy-out’ basis (the cost of securing annuities for scheme members). Our experts can ensure that the business is able to deal with the risks of this so-called ‘section 75 debt’, avoiding triggering where possible, and negotiating with scheme trustees and others as necessary. We believe that prevention is better than remedy. Many businesses are unaware of where the section 75 debt risks lie, especially in terms of likelihood and size of liability. We can work with you to highlight these issues and manage your business accordingly. We can guide strategic decisions which take into account the challenges, deal with risks, engage trustee negotiation where necessary and avoid any emergency arising.