On 12 November 2008 at a breakfast meeting with employers from the Confederation of British Industry, Rosie Winterton MP, Pensions Minister, announced that the Department for Work and Pensions (DWP) is to conduct a four week “informal consultation” on more changes to section 75 of the Pensions Act 1995 (Section 75). Section 75 requires solvent employers who wind up pension schemes as part of a corporate restructure or demerger to cover their pension liabilities to the costly buy-out level.
The Minister’s announcement was made in response to earlier representations from business lobby groups that the “debt on the employer rule” in Section 75 is a barrier to corporate activity. She acknowledged that balancing the business needs of employers and the protection of pension scheme members’ benefits was a delicate act and proposed that changes should be effected so that an employer debt should not be triggered “where the employer remains committed to the scheme.”
It is understood that the DWP hopes to hold a full public consultation in February 2009, with possible changes to legislation being implemented in October 2009.