BGCM EC May 2017

former employees have accrued in the Scheme, and the employer can pay the cost in accordance with a schedule of contributions agreed at each triennial valuation.

2. Under your rules, if the trustees and departing employer cannot agree the schedule of contributions, the trustees have the power to wind up the Section without winding up the whole Scheme. Because the Section is treated as a wholly separate scheme, and because a winding-up has been triggered, the departing employer has to pay its section 75 debt.

If the GFTU (or PCS) ceased to employ any active members, therefore, there would be no need to trigger a section 75 debt.

It is worth noting, in passing, that neither Section has formally been closed to new entrants. Membership is still open to any employee who is employed under a contract of employment which states that he or she is eligible to join. In practice neither the GFTU nor PCS are offering employment on those terms to any new employee and, in practice, the Scheme is closed. There would be nothing to prevent the GFTU from employing someone in the future (a new General Secretary for instance) on terms that he or she is eligible to join.

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