The Pensions Regulator (TPR) today published an update to its guidance on Multi-employer withdrawal arrangements to support trustees, employers and advisers, following recent amendments to the Employer Debt regs (SI 2008/731) - see Aries article. The amended regulations came into force yesterday (6 April 2008) and change the way in which employer debts are met in multi-employer schemes.

Where a multi-employer pension scheme has commenced winding-up, s.75A PA 1995 (inserted by s.272 pa 2004) and regulations made under it place a debt on an employer withdrawing from the scheme. Regulations (SI 2005/678, as amended) permit the employer to avoid paying the full debt by entering into an Approved Withdrawal Arrangement approved by TPR.

This is an arrangement to which the employer, trustees and a guarantor(s) are parties whereby the employer pays a debt lower than its share of the technical provisions debt and the guarantor guarantees to pay the difference between that amount and the employer's share of the full buy-out cost. In many multi-employer schemes the remaining employers act as the guarantors and this difference is apportioned between them. One of the aims of the 2008 amending regs (SI 2008/731) is to prevent abuse such as leaving the liabilities with a shell employer which has no assets. Particular attention is paid to the rules of apportionment.

TPR's update outlines what employers, trustees and their advisers need to do in certain circumstances, including if they need to interact with the regulator. Full guidance materials will be issued for consultation in the coming months.