A debt calculation is triggered when an employer has ceased to employ at least one person who is an active member of the scheme, and at least one other employer (who is not an employer who employs only members with DC benefits) continues to employ at least one active member of the scheme. This is known as the “employment-cessation event”.
We believe the intention is that the definition only bites when an employer has ceased to employ all active members. Therefore, closing a scheme to future accrual will not trigger a debt calculation, as all the employers withdraw at the same time.
A period of grace of up to 36 months (if the trustees choose to nominate a period longer than 12 months) has been built into the definition of “employment-cessation event” so that no debt calculation will be triggered if an employer stops employing active members but expects to take on at least one person who will be an active member of the scheme within that time frame. If he does not in fact do so, a debt calculation is triggered at the original “employment-cessation event” (as if the period of grace had not applied).