UK: DWP Consults On Amendments To The Employer Debt Regulations 2005

Last Updated: 12 September 2007
Article by Jay Doraisamy and Andrew Powell

The DWP has issued for consultation draft regulations, the Occupational Pension Schemes (Employer Debt) (Amendment) and Pension Protection Fund (Multi-employer and Entry Rules) (Amendment) Regulations 2007, which will change the way in which statutory debts are calculated when an employer ceases to participate in a multi-employer occupational pension scheme.

The key proposed changes are: changing the definition of "employment cessation event" so that a debt will arise whenever an employer stops employing active members of the scheme (albeit there will be a 12 month period of grace where an employer expects to employ an active member within that period); introducing five possible bases for apportioning the deficit arising; giving trustees a greater say in the value of assets and liabilities used in the calculations; and giving actuaries greater flexibility in terms of estimating the cost of buying out benefits. The draft regulations will also close a loophole whereby an employer providing DC benefits could become liable for part of any DB deficit. There are various proposed consequential amendments to the current regulations and other pensions legislation.

There are issues with the draft amending regulations, but hopefully most of these can be resolved as part of the consultation exercise. The proposal that debts will arise on employers, even if they all cease to employ active members at the same time, will be of particular concern to scheme sponsors. It could also be argued that there is already sufficient flexibility in the current regulations for apportionments and that these draft regulations simply increase regulation on pension schemes at a time when Government policy is all about de-regulation. That said, the draft regulations provide a useful framework for various types of apportionment arrangements. Corporates involved in or planning transactional or restructuring activity now or in the near future will need to have careful regard to the possible impact of the draft regulations (particularly the numerous calculation bases available). At the same time, trustees must not forget to pay attention to what their scheme rules say should happen when an employer ceases to participate in their scheme.

The closing date for responses to the consultation is 1 October 2007 and it would appear that the DWP intend to implement the new regulations in December 2007.

The consultation can be viewed at:

DWP Publishes Consultation Paper On The Occupational Pension Schemes (EEA States) Regulations 2007

On 31 July 2007, the DWP published a consultation paper seeking views on the draft Occupational and Personal Pension Schemes (EEA States) Regulations 2007. The closing date for responses is 24 September 2007.

The Regulations follow the incorporation on 7 July 2006 of the Occupational Pensions Directive (also known as the Institution for Occupational Retirement Pension or IORP Directive), into the European Economic Area (EEA). The Directive provides a framework for the operation and supervision of occupational pension schemes in the EU. It has previously been in effect in EU states since 23 September 2005. As a result of this incorporation, the Directive entered into force in Norway, Iceland and Liechtenstein on 12 April 2007.

The extension of the Directive to EEA states means that amendments now have to be made to some UK pensions legislation, to ensure that UK legislation recognises the Directive’s application to EEA states as well as EU states. The draft regulations therefore seek to amend the relevant UK legislation.

Communities And Local Government Issues Consultation Paper - A Framework For Fairness: Proposals For A Single Equality Bill For Great Britain

In early 2005, the Discrimination Law Review was established to assess how the discrimination legislative framework in the UK, which has developed over many years and is set out in many different places (e.g. in Acts and Regulations), could be streamlined and simplified to ensure a clear and modern approach to equality and diversity.

In light of the Discrimination Law Review, Communities and Local Government has issued a consultation paper which recognises that there is a need to simplify the law to enable a greater understanding of discrimination law, to create more effective law in order to help tackle areas of discrimination, inequality and disadvantage which remain in today’s society and to modernise the law in light of dramatic changes in society over recent decades.

The paper sets out and seeks views on the Government’s proposals for a Single Equality bill for Great Britain, which would tackle the three key areas above, simplifying the law as far as possible. It also sets out certain areas where differential treatment will remain lawful, including in relation to pensions, fixing ages for entry into occupational pension schemes and the provision of benefits, and setting limits for the state pension age.

The consultation period runs until 4 September 2007.

Reforms To The Internal Dispute Resolution Procedure ("IDRP") provisions

The Pensions Act 2004 originally proposed to make changes to the IDRP provisions contained in the 1995 Pensions Act, but after lobbying by various parties within the pensions industry (us included) those provisions were not brought into force. However, the Pensions Act 2007 introduces amendments to the IDRP requirements, which will be enacted as a new section 50 of the Pensions Act 1995.

The essence of the changes is that, whilst trustees of occupational pension schemes must still have in place arrangements for resolving any disputes that arise under their scheme, they will be able to deal with such disputes in either a one-stage or two-stage process. Currently, the procedure must include a two stage internal process.

If a two-stage process is retained, the dispute may not then be referred to the trustees until a "specified person" has considered it, and that person has made a decision. A "specified person" will be any person who is described in the dispute arrangement put in place by the scheme.

The changes are due to come into force on 26 September 2007.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.