The High Court has ruled that, under the pre-6 April 2008 definition of “employment cessation event” under the then employer debt regime, no debt was triggered where, before April 6 2008, an employer in a multi-employer final salary scheme ceased to employ any active members but continued to employ deferred or pensioner members. Cemex UK Marine Limited v MNOPF Trustees Limited
The trustees had argued that a statutory debt of about £20m had arisen when the only active member of the scheme employed by Cemex became a deferred member. Cemex argued that no debt was triggered since it had at all material times employed people who were eligible to join the scheme (but had chosen not to).
From 6 April 2008 the Employer Debt Regulations were changed to make it clear that cessation of active membership is the trigger, but the position was unclear before that because old regulation 6(4) provided that an employment-cessation event would be triggered if an employer “ceases to be an employer employing persons in the description of employment to which the scheme relates”.
Employers and trustees of DB schemes with employers which ceased to employ active members before 6 April 2008 may need to reconsider whether a statutory debt was in fact triggered at that time.