“11. It was perceived that the creation of the PPF might encourage some employers to arrange their affairs so as to throw the burden of pension scheme deficiencies upon the PPF, which would unfairly burden other schemes by increasing the amount of the levies. An example of such an arrangement is where a group of companies uses a single company (a "service company") to employ people who then work for other group companies. In such a case, the employees' pension rights could be regarded as unfairly prejudiced if, by comparison with the resources of other group companies, the service company had very limited resources to meet a section 75 debt. 12. The FSD regime was designed to mitigate such problems. In a nutshell, it enables the Regulator in specified circumstances (i) to impose, by the issue of a FSD to some or all of the other group companies (known as "targets"), an obligation to provide reasonable financial support to the under-funded scheme of the service company or insufficiently resourced employer, and (ii) to deal with non-compliance with that obligation by imposing, through a Contribution Notice (a "CN"), a specific monetary liability payable by a target to the trustees.”
“In general terms, it is undoubtedly correct that the effect of an amendment to a statute should be ascertained by construing the amended statute. Thus, what is to be looked at is the amended statute itself as if it were a free standing piece of legislation and its meaning and effect ascertained by an examination of the language of that statute. However in certain circumstances it may be necessary to look at the amending statute as well… The expression of the relevant parliamentary intention is the amending Act. It is the amending Act which is the operative provision and which alters the law from what it had been before.”
“Why cannot the following be said: The introduction of the moral hazard provisions by the 2004 Act represents a fundamental change to the nature of the section 75 debt because under the moral hazard provisions other entities may become liable to finance the deficiency in a pension scheme rather than the employer company itself. Before the 2004 Act only the employer was liable to make up the deficit and the only mechanism was by the s75 debt. Consider a case in which the moral hazard provisions are engaged, the Pensions Regulator issues a Contribution Notice requiring a third party to make a contribution to the scheme and that contribution entirely makes up any deficit which had previously existed in the scheme. In those circumstances why should the employer company remain liable for the section 75 debt? The provisions in s41(4) and s50(4) are the mechanism by which the Pensions Regulator can ensure that the other creditors of the employer do not suffer in those circumstances and the scheme is not over compensated. To allow the debt to be assignable creates the possibility of double recovery by the scheme and unnecessary loss to other creditors. The party who might suffer would be the other creditor(s) of the employer. Since the section 75 debt was only a deemed debt in the first place, why should the employer's other creditors receive a lower dividend in such a case when the deficit in the scheme has been met by third parties? Consideration of this example may be said to show that the 2004 Act was drafted on the assumption that the s75 debt was personal to the trustee. For the trustee to assign such a debt undermines a safeguard built into the fairness of the moral hazard provisions. Compromising the debt maybe different since at least in that case the employer will also have obtained a release of the balance of the s75 debt.”