The Occupational Pension Schemes (Employer Debt) Regulations (Northern Ireland) 2005

• (c) in the case of an approved withdrawal arrangement, the Authority issue a notice to the parties to the arrangement stating that they consider that amount B (or the balance remaining) should be paid, or

• (d) the occurrence of the date on which the guarantors have agreed to pay, and the trustees or managers have agreed to receive, payment of amount B.

4

• (1) Amount A shall be equal to either of the following amounts—

• (a) where a relevant transfer deduction does not apply to a withdrawal arrangement share or an approved withdrawal arrangement share, the liability proportion of the scheme shortfall amount, or

• (b) where a relevant transfer deduction applies to a withdrawal arrangement share or an approved withdrawal arrangement share, the liability proportion of the scheme shortfall amount minus the relevant transfer deduction.

• (2) For the purposes of sub-paragraph (1)(b), the relevant transfer deduction shall be determined by calculating the relevant transfer liabilities and the corresponding assets in accordance with regulation 5.

• (3) The scheme shortfall amount is the amount of the difference as at the applicable time between the value of the assets and the amount of the liabilities of the scheme determined, calculated and verified in accordance with sub-paragraph (4).

• (4) The scheme shortfall amount and, for the purposes of this paragraph, the relevant transfer deduction shall be determined, calculated and verified as follows—

• (a) where at the applicable time the trustees or managers of the scheme have received its first actuarial valuation under Part IV of the 2005 Order, in accordance with regulation 5, but that regulation shall apply as if—

• (i) paragraph (11) provided the following—

(11) The amount of the liabilities in respect of pensions and other benefits are to be calculated and verified by the actuary using the same methods and assumptions as were set out in the most recent statement of funding principles under Part IV of the 2005 Order.

, and

• (ii) paragraph (12) were omitted;

• (b) where at the applicable time the trustees or managers of the scheme have not received its first actuarial valuation under Part IV of the 2005 Order, in accordance with sub-paragraph (5).

• (5) Where sub-paragraph (4)(b) applies, the amounts or value of the assets and liabilities of a scheme and, for the purposes of this paragraph the relevant transfer deduction, must be determined, calculated and verified by the trustees or managers of the scheme and the Actuary at the applicable time in accordance with—

• (a) regulations 3 (excluded assets), 4 (contribution notices, financial support directions and restoration orders), 5 (valuation of assets), 6 (valuation of protected liabilities) and 7 (alternative valuation of assets and protected liabilities in specific cases) of the Pension Protection Fund (Valuation) Regulations (Northern Ireland) 2005, and

• (b) guidance issued by the Board of the Pension Protection Fund.

• (6) For the purposes of sub-paragraph (5), in the Pension Protection Fund (Valuation) Regulations (Northern Ireland) 2005—

• (i) references to “Article 127 valuations” and “Article 127 determinations” and provisions which relate to Article 127 valuations and Article 127 determinations shall be disregarded;

• (ii) references to “relevant time” shall be read as if they were references to “applicable time”;

• (iii) references to “Article 162 valuations” shall be read as if they were references to a valuation for the purposes of Article 75(4).

Notifiable events

5

• (1) Amount B must be calculated in accordance with either sub-paragraph (2) or (3).

• (2) Where a withdrawal arrangement or approved withdrawal arrangement provides that amount B is to be calculated in accordance with this sub-paragraph, amount B is equal to the amount (if any) that would be the amount of the liability share due from the cessation employer under Article 75(4) if—

• (a) the employment-cessation event had occurred at the guarantee time, and

• (b) the cessation employer had not entered into a withdrawal arrangement or an approved withdrawal arrangement.

• (3) Where the withdrawal arrangement or approved withdrawal arrangement provides that amount B is to be calculated in accordance with this sub-paragraph, amount B is equal to the amount of the liability share that would have been treated as due from the cessation employer under Article 75(4) if the cessation employer had not entered into a withdrawal arrangement or approved withdrawal arrangement, less the sum of—

• (a) in the case of a withdrawal arrangement, the withdrawal arrangement share or in the case of an approved withdrawal arrangement, the approved withdrawal arrangement share;

• (b) in the case of a withdrawal arrangement, if the amount that the withdrawal arrangement provides for the cessation employer to pay exceeds the withdrawal arrangement share, an amount equal to that excess.

SCHEDULE 1B — Notifiable Events

Calculation of the amount of scheme liabilities and value of scheme assets

Employment-cessation events: periods of grace

6A

• (1) Where but for this regulation an employment-cessation event would have occurred in relation to an employer (“A”) and before, on, or within 3 months after, the cessation date A gives the trustees or managers of a relevant scheme (“the scheme”) a period of grace notice, A shall be treated for a period of grace as if he employed a person who is an active member of the scheme, but—

• (a) if by the last day of the period of grace A does not employ a person who is an active member of the scheme or enters into a deferred debt arrangement, A shall be treated as if the period of grace had not applied;

• (b) if at any time during the period of grace A—

• (i) no longer intends to employ any person who shall be an active member of the scheme, or

• (ii) does not intend to enter into a deferred debt arrangement by the last day of the period of grace,

A shall notify the trustees or managers of the scheme and A shall be treated as if the period of grace had not applied;

• (c) if at any time during the period of grace A employs an active member of the scheme (whether before or after giving the period of grace notice), A shall be treated as if an employment-cessation event had not occurred in relation to him on the cessation date which applied to the period of grace notice, or

• (d) if during the period of grace an insolvency event occurs in relation to A, A shall be treated as if the period of grace had not applied.

• (2) Where in accordance with paragraph (1) an employer is treated for the period of grace as if he employed at least one person who is an active member of the scheme, he shall for the purposes of these Regulations and regulation 16 of the FSD Regulations (multi-employer schemes) be treated during that period as if he were an employer in relation to the scheme.

• (3) For the purposes of this regulation, the following definitions shall apply—

• “cessation date” means the date on which the employer ceases to employ at least one person who is an active member of the scheme and at least one other person who is not a defined contribution employer continues to employ at least one person who is an active member of the scheme;

• “relevant scheme” means a scheme in relation to which A is not aware of any intention for it to become a frozen scheme during the period of grace;

• “period of grace” means a period commencing on the cessation date and ending on the earlier of— the day referred to in paragraph (4), or the day on which the employer employs a person who is an active member of the scheme;

• “period of grace notice” means a notice in writing that an employer intends during the period of grace to employ at least one person who shall be an active member of the scheme.

• (4) The day mentioned in paragraph (a) of the definition of “period of grace” in paragraph (3) is—

• (a) the day which is 12 months after the cessation date, or

• (b) a day which—

• (i) is more than 12 months after the cessation date;

• (ii) is less than 36 months after the cessation date, and

• (iii) the trustees or managers of the scheme choose to nominate in accordance with paragraph (5).

• (5) A nomination mentioned in paragraph (4)(b)(iii) may only be made—

• (a) in writing, and

• (b) before—

• (i) the end of 12 months after the cessation date, where no day has previously been nominated under paragraph (4)(b)(iii), or

• (ii) the day previously nominated under paragraph (4)(b)(iii).

Scheme apportionment arrangements

6B

• (1) Before the trustees or managers of the scheme enter into a scheme apportionment arrangement, the funding test must be met in relation to it.

• (2) Paragraph (1) does not apply where paragraph (3) or (4) applies.

• (3) This paragraph applies where—

• (a) the employer’s scheme apportionment arrangement share will be higher than the liability share, and

• (b) the trustees or managers are satisfied that the employer is able to pay the scheme apportionment arrangement share.

• (4) This paragraph applies where—

• (a) the scheme has commenced winding-up by the date the scheme apportionment arrangement is entered into;

• (b) the employer’s scheme apportionment arrangement share will be lower than that employer’s liability share;

• (c) the trustees or managers are satisfied that it is likely that the employer—

• (i) will be able to pay the scheme apportionment arrangement share, and

• (ii) would have been unable to pay the liability share if it applied;

• (d) the trustees or managers are satisfied that it is likely that any of the employers who—

• (i) are remaining in the scheme, and

• (ii) are not defined contribution employers,

will be able to pay any amount by which the employer’s scheme apportionment arrangement share will be less than the employer’s liability share;

• (e) the scheme is not in an assessment period, and

• (f) the trustees or managers are satisfied that an assessment period is unlikely to begin in relation to the scheme within the following 12 months.

Withdrawal arrangements

6C

• (1) The trustees or managers may enter into a withdrawal arrangement, before, on or after the applicable time (which applies to an employment-cessation event), provided that—

• (a) the funding test is met, and

• (b) they are satisfied that at the date of the agreement, the guarantors have sufficient financial resources to be likely to be able to pay amount B that would arise on that date (or pay the likely amount B).

• (2) Where a withdrawal arrangement comes into force—

• (a) the cessation employer’s share of the difference shall for the purposes of regulation 6(2) be the withdrawal arrangement share, and

• (b) Article 75(4) shall apply as if amount B is treated as a debt due from the guarantors at the guarantee time for which (if there is more than one guarantor) they are jointly liable or, if the withdrawal arrangement so provides, jointly and severally liable.

• (3) A relevant transfer deduction shall apply to a withdrawal arrangement share provided any transfer or transfers of the cessation employer’s relevant transfer liabilities and corresponding assets are completed on or before the date which is 12 months after the employment-cessation event.

• (4) Schedule 1A makes further provision in relation to withdrawal arrangements.

Notifiable events

6D

Schedule 1B applies for the purposes of Article 64(2)(a) and(3)(a) of the 2005 Order (duty to notify the Regulator of certain events) so as to require notice of the events prescribed in that Schedule to be given to the Authority by the persons prescribed in relation to those events, unless the Authority direct otherwise.

Approved withdrawal arrangements

Regulated apportionment arrangements

Calculation of amounts due from guarantors by virtue of regulation 7

Single employer sections, multi-employer sections, etc.

Frozen schemes and former employers

Conditions for withdrawal arrangements and approved withdrawal arrangements

Actuarial certificates

Events for payment of amount B

Calculation of amount A

Calculation of amount B

Approval of withdrawal arrangements in advance

6

• (1) A withdrawal arrangement may be approved by the Authority in advance of an employment-cessation event occurring in relation to an employer and for the purposes of approving a withdrawal arrangement prior to an employment-cessation event occurring in relation to an employer, references in this Schedule and regulation 7 to “cessation employer”, “approved withdrawal arrangement share”, “amount B”, “amount A”, “cessation expenses”, “guarantors” and “relevant transfer deduction” shall be read accordingly.

• (2) Where an approved withdrawal arrangement has been approved prior to an employment-cessation event, regulation 7 shall apply as if—

• (a) following an employment-cessation event occurring in relation to the employer who is party to the approved withdrawal arrangement, the employer gave the notice required under regulation 7(1);

• (b) the Authority issued the directions under regulation 7(1);

• (c) at the time when the approved withdrawal arrangement comes into force regulation 7(6) applies and the approved withdrawal arrangement share and amount B are treated as debts due.

Replacement withdrawal arrangements

7

Where a withdrawal arrangement is replaced with an amended withdrawal arrangement or an amended approved withdrawal arrangement, paragraph 1, regulation 6B and regulation 7 shall apply to the amended withdrawal arrangement or amended approved withdrawal arrangement as they applied to the original arrangement.

1

• (1) Where a withdrawal arrangement or an approved withdrawal arrangement is in force in relation to a scheme, each of the guarantors must give notice to the Authority if such an event as is mentioned in sub-paragraph (2) occurs in relation to that person.

• (2) The events referred to in sub-paragraph (1) are—

• (a) any decision by the relevant person to take action which will, or is intended to, result in a debt which is or may become due—

• (i) to the trustees of the scheme, or

• (ii) if the Board of the Pension Protection Fund has assumed responsibility for the scheme in accordance with Chapter 3 of Part III of the 2005 Order, to the Board,

not being paid in full;

• (b) a decision by the relevant person to cease to carry on business (including any trade or profession) in the United Kingdom or, if the relevant person ceases to carry on such business without taking such a decision, his doing so;

• (c) where applicable, receipt by the relevant person of advice that the person is trading wrongfully within the meaning of Article 178 of the Insolvency (Northern Ireland) Order 1989 (wrongful trading), or circumstances occurring in which a director or former director of the company knows that there is no reasonable prospect that the company will avoid going into insolvent liquidation within the meaning of that Article, and for this purpose Article 178(4) of that Order applies;

• (d) any breach by the relevant person of a covenant in an agreement between the relevant person and a bank or other institution providing banking services, other than where the bank or other institution agrees with the relevant person not to enforce the covenant;

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) where the relevant person is a company, a decision by a controlling company to relinquish control of the relevant person or, if the controlling company relinquishes such control without taking such a decision, its doing so;

• (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (h) where the relevant person is a company or partnership, the conviction of an individual, in any jurisdiction, for an offence involving dishonesty, if the offence was committed while the individual was a director or partner of the relevant person;

• (i) an insolvency event occurring in relation to the relevant person for the purposes of Part III of the 2005 Order (see Article 105 of that Order: insolvency event, insolvency date and insolvency practitioner).

• (3) A notice under sub-paragraph (1) must be given in writing as soon as reasonably practicable after the relevant person becomes aware of the event.

• (4) In this paragraph—

• “control” has the meaning given in Article 4(10) of the Insolvency (Northern Ireland) Order 1989 and “controlling company” is to be read accordingly;

• “director” has the meaning given in section 250 of the Companies Act 2006;

• “key relevant person posts” means the Chief Executive and any director or partner responsible in whole or in part for the financial affairs of the relevant person.

2

• (1) The trustees or managers of a scheme must give notice to the Authority of any decision by them to take action which will, or is intended to, result in

• (a) any entering into a scheme apportionment arrangement on or after the applicable time;

• (b) a flexible apportionment arrangement taking effect;

• (c) a deferred debt arrangement taking effect, or;

• (d) any event which terminates a deferred debt arrangement in accordance with regulation 6F(6).

• (2) A notice under sub-paragraph (1) must be given in writing as soon as reasonably practicable after the trustees or managers of the scheme make the decision or become aware of the event.

3

• (1) No duty to which a person is subject ... is to be regarded as contravened merely because of any information or opinion contained in a notice under paragraph 1 or 2.

• (2) Sub-paragraph (1) does not require any person to disclose protected items within the meaning of Article 283 of the 2005 Order (protected items)

• (3) Article 10 (civil penalties) applies to any person who without reasonable excuse fails to comply with an obligation imposed on him under paragraph 1 or 2.

SCHEDULE 1C — Actuary’s Certificate for Withdrawal Arrangement Share or Approved Withdrawal Arrangement Share in Multi-Employer Scheme

SCHEDULE 1D — Actuary’s Certificate for Amount B under a Withdrawal Arrangement or an Approved Withdrawal Arrangement in a Multi-Employer Scheme

Employment-cessation events: general

6ZA

• (1) In these Regulations “employment-cessation event” means, subject to paragraphs (2) to (7), an event which—

• (a) occurs in relation to a multi-employer scheme;

• (b) is not a relevant event, and

• (c) subject to regulations 6A and 6F, occurs on the date on which—

• (i) an employer has ceased to employ at least one person who is an active member of the scheme, and

• (ii) at least one other employer who is not a defined contribution employer continues to employ at least one active member of the scheme.

• (2) Subject to paragraphs (3) and (4), an employment-cessation event does not occur where there is a restructuring within regulation 6ZB or 6ZC.

• (3) An employment-cessation event occurs where there is a restructuring within regulation 6ZB and within 6 years of that, it becomes apparent that—

• (a) the exiting employer or receiving employer provided the trustees or managers with—

• (i) incorrect information, or

• (ii) incomplete information,

and the trustees or managers are satisfied that they would have made a different decision in step 4 in regulation 6ZB(9) if they had had the correct or complete information;

• (b) step 6 has not been completed in accordance with regulation 6ZB(13) and (14), or

• (c) step 7 has not been completed in accordance with regulation 6ZB(15) and (16).

• (4) An employment-cessation event occurs where there is a restructuring within regulation 6ZC and within 6 years of that, it becomes apparent that—

• (a) step 4 has not been completed in accordance with regulation 6ZC(9) and (10), or

• (b) step 5 has not been completed in accordance with regulation 6ZC(11) and (12).

• (5) An employment-cessation event does not occur where—

• (a) there is a restructuring within regulation 6ZB or 6ZC;

• (b) at any time after that, it becomes apparent that any step has not been completed in accordance with regulation 6ZB or 6ZC, and

• (c) paragraphs (3) and (4) of this regulation do not apply.

• (6) Where an employment-cessation event occurs in accordance with paragraph (3) or (4)—

• (a) Article 75(4) applies as if the amount of the debt due from the exiting employer is treated as a debt due from the exiting employer and the receiving employer jointly and severally;

• (b) the date on which the employment-cessation event occurs is the date referred to in paragraph (1)(c), and

• (c) for the purposes of calculating the exiting employer’s liability proportion for the purposes of the exiting employer’s liability share, the liabilities attributable to employment with the exiting employer shall be determined as if nothing had been done in relation to carrying out any of the steps in regulation 6ZB or 6ZC.

• (7) An employment-cessation event does not occur in respect of the leaving employer within the meaning given in regulation 6E(7) where—

• (a) the conditions in regulation 6E(2) are met, and

• (b) before the end of the period of 28 days beginning with the day on which those conditions were met, an event occurs in relation to that employer which meets the requirements of paragraph (1)(a) to (c) of this regulation.

Employment-cessation events: exemptions

6ZB

• (1) There is a restructuring within this regulation if each of steps 1 to 6 in the following paragraphs are completed, and the date on which there is a restructuring within this regulation is the date on which step 6 has been completed.

• (2) Each of steps 2 to 7 can only be carried out if the previous step has been completed.

• (3) Step 1 is for the exiting employer to write to the trustees or managers asking them to make a decision for the purposes of this regulation.

• (4) The exiting employer decides whether and when to carry out step 1.

• (5) Step 2 is for the exiting employer and receiving employer (unless the receiving employer has not yet been created) to provide any information which the trustees or managers—

• (a) may request, and

• (b) are satisfied is necessary to complete step 4.

• (6) The trustees or managers must request any information, and the exiting employer and receiving employer must provide any information, for the purposes of completing step 2 without undue delay.

• (7) Step 3 is for the trustees or managers to consult—

• (a) the exiting employer about the decision to be made in step 4, and

• (b) the receiving employer about the decision to be made in step 4, unless the receiving employer has not yet been created.

• (8) The trustees or managers must complete step 3 without undue delay.

• (9) Step 4 is for the trustees or managers to decide whether they are satisfied that the receiving employer will be at least as likely—

• (a) as the exiting employer to meet all the exiting employer’s liabilities in relation to the scheme, and

• (b) to meet any liabilities in relation to the scheme which the receiving employer has immediately before step 6 is carried out.

• (10) The trustees or managers must—

• (a) complete step 4 without undue delay, and

• (b) consider, when carrying out step 4, factors including, but not limited to, any material change in legal, demographic or economic circumstances, as described in regulation 5(4)(d) of the Scheme Funding Regulations, that would justify a change to the method or assumptions used on the last occasion on which the scheme’s technical provisions were calculated.

• (11) Step 5 is for the trustees or managers to send—

• (a) the exiting employer, and

• (b) the receiving employer, unless the receiving employer has not yet been created,

their decision in step 4, and the reasons for that decision, in writing.

• (12) The trustees or managers must complete step 5 without undue delay.

• (13) Step 6 is for—

• (a) the receiving employer to take over responsibility, under a legally enforceable agreement, for all of the exiting employer’s—

• (i) assets;

• (ii) employees, and

• (iii) scheme members, and

• (b) all of the exiting employer’s liabilities in relation to the scheme to be—

• (i) taken over by the receiving employer under a legally enforceable agreement so that the receiving employer is responsible for them, or

• (ii) where it is impossible for the receiving employer to take over the exiting employer’s liabilities in relation to the scheme under a legally enforceable agreement, treated for all purposes as being the responsibility of the receiving employer.

• (14) The receiving employer decides whether to carry out step 6, but the receiving employer can only carry out step 6—

• (a) where the trustees or managers decided in step 4 that they are satisfied;

• (b) where the trustees or managers are satisfied that there has been no change which would alter that decision in step 4, and

• (c) within the 18 weeks, or such longer period up to a total of 36 weeks as the trustees or managers may choose, after the date of the written decision in step 5.

• (15) Step 7 is for the receiving employer and exiting employer to send the trustees or managers written confirmation—

• (a) that step 6 has been completed, and

• (b) of the date on which step 6 was completed.

• (16) The receiving employer and exiting employer must complete step 7 without undue delay.

• (17) In this regulation, liabilities in relation to the scheme means all such liabilities including, but not limited to, any—

• (a) liabilities which—

• (i) have accrued to or in respect of scheme members, and

• (ii) are attributable to the employer under regulation 6(4);

• (b) amounts treated as a debt due to the trustees or managers of the scheme, including such debts due in accordance with Article 75;

• (c) liabilities or amounts which have been apportioned to the employer in—

• (i) a scheme apportionment arrangement;

• (ii) an exercise of a scheme apportionment rule before 6th April 2008, or

• (iii) a regulated apportionment arrangement;

• (d) liabilities which were attributed to the employer as part of a previous restructuring within this regulation or regulation 6ZC;

• (e) amount for which the employer is a guarantor under a withdrawal arrangement or an approved withdrawal arrangement;

• (f) payments which are due to be made by the employer under—

• (i) the schedule of contributions, or

• (ii) any recovery plan;

• (g) liability share of the employer.

• (h) liabilities for which the employer—

• (i) has taken over responsibility under a flexible apportionment arrangement, or

• (ii) is treated for all purposes as being responsible under such an arrangement, and

• (i) actual and contingent liabilities.

6ZC

• (1) There is a restructuring within this regulation if each of steps 1 to 4 in the following paragraphs are completed, and the date on which there is a restructuring within this regulation is the date on which step 4 has been completed.

• (2) Each of steps 2 to 5 can only be carried out if the previous step has been completed.

• (3) Step 1 is for the exiting employer to write to the trustees or managers asking them to make a decision for the purposes of this regulation.

• (4) The exiting employer decides whether and when to carry out step 1.

• (5) Step 2 is for the trustees or managers to decide whether they are satisfied that the following four conditions are met—

• (a) the assets of the scheme are at least equal to the protected liabilities of the scheme;

• (b) either—

• (i) there are only one or two relevant members, or

• (ii) no more than 3% of the total number of scheme members in respect of whom defined benefits have accrued are relevant members;

• (c) the annual amount of accrued pension in respect of the relevant members does not exceed the maximum amount where—

• (i) the annual amount of accrued pension includes pensions in payment and pensions not in payment;

• (ii) the annual amount of accrued pensions in payment means the most recent payment of pension to each relevant member multiplied to produce an estimated annual amount;

• (iii) the annual amount of accrued pensions not in payment means the annual amount of pension to which each relevant member has accrued rights, and

• (iv) the maximum amount means—

• (aa) in the year commencing on 6th April 2010, £20,000, and

• (bb) in any subsequent year, £20,000 plus £500 for each year after the year commencing on 6th April 2010, and

• (d) if any restructurings within this regulation in relation to the scheme have occurred in the 3 years before step 4 is completed, those restructurings and the restructuring which occurs when step 4 is completed involve a combined total of—

• (i) no more than—

• (aa) five scheme members in respect of whom defined benefits have accrued, or

• (bb) 7.5% of the total number of scheme members in respect of whom defined benefits have accrued,

whichever is the higher, and

• (ii) no more than £50,000 of the annual amount of accrued pension as calculated for the purposes of sub-paragraph (c).

• (6) The trustees or managers must complete step 2—

• (a) without undue delay, and

• (b) using the figures contained in the most recent—

• (i) actuarial valuation under Article 162 of the 2005 Order (valuations to determine scheme underfunding) for the assets and protected liabilities of the scheme, and

• (ii) scheme return within the meaning in Article 60(2) of the 2005 Order (scheme returns: supplementary) for the number of members of the scheme.

• (7) Step 3 is for the trustees or managers to send—

• (a) the exiting employer, and

• (b) the receiving employer, unless the receiving employer has not yet been created,

their decision in step 2 in writing.

• (8) The trustees or managers must complete step 3 without undue delay.

• (9) Step 4 is for—

• (a) the receiving employer to take over responsibility, under a legally enforceable agreement, for all of the exiting employer’s—

• (i) assets;

• (ii) employees, and

• (iii) scheme members, and

• (b) all of the exiting employer’s liabilities in relation to the scheme (as defined in regulation 6ZB(17)) to be—

• (i) taken over by the receiving employer under a legally enforceable agreement so that the receiving employer is responsible for them, or

• (ii) where it is impossible for the receiving employer to take over the exiting employer’s liabilities in relation to the scheme under a legally enforceable agreement, treated for all purposes as being the responsibility of the receiving employer.

• (10) The receiving employer decides whether to carry out step 4, but the receiving employer can only carry out step 4—

• (a) where the trustees or managers decided in step 2 that they are satisfied, and

• (b) within the 18 weeks, or such longer period up to a total of 36 weeks as the trustees or managers may choose, of the date of the written decision in step 3.

• (11) Step 5 is for the receiving employer and exiting employer to send the trustees or managers written confirmation—

• (a) that step 4 has been completed, and

• (b) of the date on which step 4 was completed.

• (12) The receiving employer and exiting employer must complete step 5 without undue delay.

• (13) In this regulation “relevant members” means scheme members in respect of whom defined benefits accrued as a result of pensionable service with the exiting employer.

6ZD

• (1) The trustees or managers may decide that any costs incurred by them as a result of the steps in regulation 6ZB or 6ZC are to be met by the exiting employer, the receiving employer or both.

• (2) The trustees or managers may make a decision under paragraph (1)—

• (a) at any time during the steps in regulation 6ZB or 6ZC, or

• (b) within one month after the final step in either of those regulations is completed.

• (3) Where the trustees or managers make such a decision—

• (a) they must write to the exiting employer, the receiving employer or both (as the case may be) with details of their costs, and

• (b) the exiting employer, the receiving employer or both (as the case may be) must pay those costs.

Employment-cessation events: periods of grace

Scheme apportionment arrangements

Withdrawal arrangements

Notifiable events

Approved withdrawal arrangements

Regulated apportionment arrangements

Calculation of amounts due from guarantors by virtue of regulation 7

Single employer sections, multi-employer sections, etc.

Flexible apportionment arrangements

6E

• (1) Except in the case of a frozen scheme, a flexible apportionment arrangement takes effect on the date on which both—

• (a) the conditions in paragraph (2) are met, and

• (b) an employment-cessation event—

• (i) has occurred in relation to the leaving employer before the date on which the conditions in paragraph (2) are met, or

• (ii) would have occurred in relation to the leaving employer if regulation 6ZA(7) had not applied.

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1A) Where the scheme is a frozen scheme, the flexible apportionment arrangement takes effect on the date on which the conditions in paragraph (2) are met.

• (2) The conditions are that—

• (a) subject to paragraph (4), the funding test is met;

• (b) one or more replacement employer—

• (i) takes over responsibility under a legally enforceable agreement for all the liabilities in relation to the scheme (within the meaning given in regulation 6ZB(17)) of the leaving employer as those liabilities stand immediately before the flexible apportionment arrangement takes effect, taking into account any reduction mentioned in paragraph (5)(c), or

• (ii) where it is impossible for the replacement employer to take over responsibility for those liabilities under a legally enforceable agreement, is treated for all purposes as being responsible for those liabilities;

• (c) the following persons consent in writing—

• (i) the trustees or managers of the scheme;

• (ii) the leaving employer, and

• (iii) all the replacement employers referred to in sub-paragraph (b);

• (d) the leaving employer is not in a period of grace in accordance with regulation 6A;

• (e) the requirements set out in paragraph (5) are met for any payment of any part of a debt—

• (i) due as a result of the employment-cessation event referred to in paragraph (1)(b)(i), or

• (ii) that would have been due as a result of the employment-cessation event referred to in paragraph (1)(b)(ii) that would have occurred if regulation 6ZA(7) had not applied;

• (f) the scheme is not—

• (i) in an assessment period, or

• (ii) being wound up, and

• (g) the trustees or managers of the scheme are satisfied that an assessment period is unlikely to begin in relation to the scheme within the period of 12 months beginning with the date on which a flexible apportionment arrangement takes effect.

• (3) Where a flexible apportionment arrangement takes effect in accordance with paragraph (1)(b)(i), Article 75(4) is modified so that no amount is to be treated as a debt due to the trustees or managers of the scheme as a result of the employment-cessation event.

• (4) The funding test does not have to be met where—

• (a) the funding test is met for a different flexible apportionment arrangement;

• (b) the time when the flexible apportionment arrangement takes effect is or will be, in the opinion of the trustees or managers of the scheme, the same as or similar to the time when the different flexible apportionment arrangement takes effect, and

• (c) the trustees or managers of the scheme are satisfied that the funding test would be met if it were carried out again.

• (5) The requirements referred to in paragraph (2)(e) are—

• (a) the payment (which in this paragraph means the payment referred to in paragraph (2)(e)) is made to the trustees or managers of the scheme by or on behalf of the leaving employer;

• (b) the payment is in addition to any amount that is required to be paid under the schedule of contributions;

• (c) the trustees or managers of the scheme decide to make a reduction of the liabilities in relation to the scheme (within the meaning given in regulation 6ZB(17)) of the leaving employer as a result of the payment, and

• (d) the reduction of those liabilities relates to the amount of the payment.

• (6) The trustees or managers of the scheme may require the leaving employer or the replacement employer (or both) to pay all or part of the costs which the trustees or managers of the scheme have incurred by virtue of this regulation.

• (7) In this regulation—

• “the leaving employer” means an employer—in relation to a multi-employer scheme;in respect of whom a relevant event has not occurred, andwho—employs at least one active member of the scheme in respect of whom defined benefits are accruing, orused to employ at least one such active member;

• “replacement employer” means an employer who, on the date on which the flexible apportionment arrangement takes effect—is an employer in relation to the same multi-employer scheme as the leaving employer;either—is employing at least one active member of the scheme in respect of whom defined benefits are accruing, orused to employ at least one such active member and no amount was treated as a debt due to the trustees or managers of the scheme when the last such active member ceased to be employed, andis an employer in respect of whom a relevant event has not occurred.

Approved withdrawal arrangements

Regulated apportionment arrangements

Calculation of amounts due from guarantors by virtue of regulation 7

Single employer sections, multi-employer sections, etc.

Deferred debt arrangement

6F

• (1) A deferred debt arrangement takes effect on the date on which the trustees or managers of the scheme, being satisfied that the conditions in paragraphs (2) and (3) are met, consent in writing to the arrangement.

• (2) The condition in this paragraph is that an employment-cessation event—

• (a) has occurred in relation to the deferred employer before the date on which the conditions in paragraph (3) are met, or

• (b) would have occurred in relation to the deferred employer if the deferred employer had not entered into, and remained in, a period of grace in accordance with regulation 6A until immediately before the date on which the deferred debt arrangement is to take effect.

• (3) The conditions in this paragraph are that—

• (a) the scheme is not in an assessment period or being wound up, and

• (b) the trustees or managers of the scheme are satisfied that—

• (i) an assessment period is unlikely to begin in relation to the scheme within the period of 12 months beginning with the date on which the trustees or managers expect the deferred debt arrangement to take effect, and

• (ii) the deferred employer’s covenant with the scheme is not likely to weaken materially within the period of 12 months beginning with the date on which the trustees or managers expect the deferred debt arrangement to take effect.

• (4) A deferred employer shall be treated during the period that the deferred debt arrangement is in place—

• (a) as if employing at least one person who is an active member of the scheme, and

• (b) for the purposes of these Regulations and regulation 16 of the FSD Regulations (multi-employer schemes), as an employer in relation to the scheme.

• (5) Where a deferred debt arrangement is in place, the deferred employer shall be treated as if the employment-cessation event in paragraph (2) had not, or would not have, occurred.

• (6) The deferred debt arrangement terminates on the first date on which one of the following events occurs—

• (a) the deferred employer commences employing a person who is an active member of the scheme;

• (b) the deferred employer and the trustees or managers of the scheme agree that an employment-cessation event shall be treated as having occurred for the purposes of bringing the deferred debt arrangement to an end in relation to the deferred employer;

• (c) a relevant event occurs in relation to the deferred employer;

• (d) all the employers in the scheme have experienced a relevant event or have become deferred employers;

• (e) the scheme commences winding up;

• (f) the deferred employer restructures, unless—

• (i) the restructuring falls within either regulation 6ZB or 6ZC, and

• (ii) where the receiving employer is a deferred employer, the trustees or managers of the scheme are satisfied that the conditions in paragraph (3) are met;

• (g) a freezing event as defined in regulation 9(2)(b) occurs in relation to the scheme;

• (h) the trustees or managers of the scheme serve a notice on the deferred employer stating that the deferred debt arrangement has come to an end on the grounds that the trustees or managers of the scheme are reasonably satisfied that—

• (i) the deferred employer has failed to comply materially with its duties under the Scheme Funding Regulations;

• (ii) the deferred employer’s covenant with the scheme is likely to weaken materially in the next 12 months, or

• (iii) the deferred employer has failed to comply materially with its duties under regulation 6 of the Occupational Pension Schemes (Scheme Administration) Regulations (Northern Ireland) 1997 (duty to disclose information).

• (7) For the purposes of these Regulations, where—

• (a) an event referred to in paragraph (6)(a) or (e) occurs, the deferred employer shall be treated as if the employment-cessation event in paragraph (2) had not, or would not have, occurred;

• (b) an event referred to in paragraph (6)(b), (c), (d) or (h) occurs, the date of that event shall be treated as the date of the employment-cessation event in relation to the deferred employer;

• (c) the deferred employer restructures in circumstances where—

• (i) paragraph (6)(f) does not apply, the date of the restructuring shall be treated as the date of the employment-cessation event in relation to the deferred employer;

• (ii) paragraph (6)(f) applies—

• (aa) if the receiving employer is not a deferred employer, paragraph (6)(a) applies to the receiving employer, and

• (bb) if the receiving employer is a deferred employer, the deferred debt arrangement shall continue;

• (d) a freezing event referred to in paragraph (6)(g) occurs, the deferred employer—

• (i) becomes a former employer in relation to the scheme for the purposes of regulation 9, and

• (ii) shall be treated as if the employment-cessation event referred to in paragraph (2)(a) had not, or would not have, occurred and the deferred debt arrangement had never taken effect.

Approved withdrawal arrangements

Regulated apportionment arrangements

Calculation of amounts due from guarantors by virtue of regulation 7

Single employer sections, multi-employer sections, etc.