DWP are consulting on yet more amendments to the debt legislation.
In April 2010 new exemptions from the debt legislation were introduced. These apply where two employers in a multi-employer defined benefit scheme merge. Subject to the merger terms satisfying STRICT conditions no statutory debt arises on the employer exiting the scheme.
The DWP recognise the 2010 exemptions do not go far enough to assist business. Equally DWP remains rightly concerned to protect scheme finances and hence members on the employers supporting a scheme reducing.
New Simplified Approach
On a corporate restructuring (to be widely defined which is a new feature) the exiting employer(s) member liabilities can be apportioned to other group employer(s) and only the amount of its member liabilities has to be identified. In contrast the existing apportionment rules require the actual statutory debt also to be calculated and certified by the scheme actuary.
The DWP Consultation closes on the 10 August 2011.
Amending Regulations will hopefully be made in the Autumn - adding to the formidable pile of debt Regulations!