Broadly, under section 75 of the Pensions Act 1995 (and also under the Occupational Pension Schemes (Employer Debt) Regulations 2005), a debt becomes due to the trustees of a multi-employer defined benefit pension scheme when an "employment cessation event" occurs in relation to a participating employer. Note that section 75 debts are also triggered in other circumstances – for more details on the section 75 regime, please see our Microsite page here
Cemex v MNOPF Trustees Limited concerned whether an employment cessation event had occurred in relation to Cemex, a participating employer in the Merchant Navy Officers Pension Fund. The Court had to consider the version of the employer debt regulations in force in 2005; the definition of employment cessation event has since been amended.
The Court held that an employment cessation event did not occur simply because the employer ceased to employ its last active member, as long as the employer employed someone who was eligible to join the scheme (but who chose not to) or continued to employ a deferred member.
In broad terms, the position would be different in relation to debts triggered after 6 April 2008, in light of amending regulations which link an employment cessation event to the employer ceasing to employ its last active member. However, the case does clarify the position in relation to triggering events under the old regime. It may also mean that some employers are unwittingly still on the hook for section 75 debts in certain circumstances.
In reaching his conclusions, the judge rejected the relevance of regulations which govern the scheme-specific funding regime and the case of Hearn v Dobson, which considered the meaning of "employer" under those regulations.
We understand that the case is unlikely to be appealed.