The Department for Work and Pensions has launched a consultation seeking views on new draft regulations regarding section 75 employer debt, or buy-out debt.

The existing Occupational Pension Schemes (Employer Debt) Regulations 2005 aim to provide protection for members of defined benefit schemes where the employer ceases to participate actively in the scheme.

According to the consultation document, it has been argued that the regulations unnecessarily inhibit corporate activity, in particular the ability of companies to restructure in order to better deal with changes in the economic environment.

The government has been examining whether there is scope for further flexibility in the section 75 employer debt requirements, and is seeking views on the Occupational Pension Schemes (Employer Debt and Miscellaneous Amendments) Regulations 2011. Views are also sought on the impact assessment accompanying the draft regulations.

Pensions Minister Steve Webb said employers have told the government that “rigid” rules on employer debt have been causing an unnecessary burden on businesses.

“We want to help businesses to re-structure without triggering a debt, providing that members are safeguarded. Our new Flexible Apportionment Arrangements and an extended period of grace will give employers greater flexibility to restructure their businesses, without unnecessarily triggering a pension debt,” Webb said.

Access the consultation document, the draft regulations, and the impact assessment here.

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