28 July 2011
The Pensions Regulator has today published a statement, “Identifying your statutory employer”, to help trustees understand the importance of identifying their scheme’s statutory employer and how they should set about doing this.
Why is this important? The statutory employer is legally responsible for meeting the funding requirements of a defined benefit scheme and paying s75 debt if certain events occur. The fate of the statutory employer is also relevant in triggering any future entry into the Pension Protection Fund.
For many schemes, particularly those running (or who may run) a funding deficit, the “asset” represented by employer’s support in the form of payments under a Recovery Plan is likely to be one of the most critical assets available to trustees. Formally identifying where that promise comes from and, subsequently, the strength of that promise, is therefore vital.