Employer debt

In the context of pensions, the statutory debt arising under section 75 or section 75A of the Pensions Act 1995. Also known as a section 75 debt, an employer that participates in a defined-benefit (DB) scheme (www.practicallaw.com/0-107-7545) may owe an employer debt to the scheme's trustees if the scheme is underfunded. The debt arises either on the winding-up of a DB scheme, or when a participating employer (www.practicallaw.com/6-206-1084) in a multi-employer scheme (www.practicallaw.com/3-206-1085) withdraws while the scheme is ongoing. It is usually calculated by reference to the buy-out cost (www.practicallaw.com/0-201-6481).

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