Pension schemes hit the news earlier this year, when a scheme was refused entry to the Pension Protection Fund because it had 'lost' its statutory employer.

The Pensions Regulator is now urgently pressing all trustees of defined benefit pension schemes to identify which employer(s) will meet the statutory criteria required to count as an 'employer' in relation to their scheme. 

Identifying the statutory employer(s) is crucial for a number of purposes, mainly:

  • Eligibility for entry to the PPF.
  • Negotiations over scheme funding and valuations.
  • Assessing the strength of the employer covenant.
  • Claiming a s.75 debt where a scheme is wound up or where an employer ceases to participate in the scheme.

From November 2011, the Pensions Regulator will be requiring all schemes to identify their statutory employer(s) in their annual scheme returns.  However, the process of identifying the statutory employer(s) is not always simple, particularly because the relevant legislation has changed over time. 

In some circumstances former employers may still be classed as statutory employers, despite having ceased in practice to participate in the scheme and some current employers may also not meet the criteria.