Advanced Payment Flexibility

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As reported in the June 2015 Employer Update, the Pensions Committee is investigating the ability for employers to pay deficit contributions (that are required to be paid in accordance with the Scheme’s existing Recovery Plan) in advance of the due date. 

The Committee has received advice from the Scheme Actuary on this subject and is due to receive further advice, with a view to agreeing an appropriate ‘discount rate’ (that is the credit given for early payment) at its September 2015 meeting. The agreed discount rate is expected to apply for advanced payments that are made up to and including March 2016. The discount rate that will apply for future years is anticipated to be considered and agreed as part of the Scheme’s 2015 valuation process.

As a reminder, this option will be attractive for employers wanting to make advanced deficit

contribution payments compared to the existing Recovery Plan. However, it should be borne in mind that if an employer makes advanced payments and subsequently, either deliberately or inadvertently, triggers a statutory ‘debt on withdrawal’ (also known as a ‘s75 debt’), then the payments made in advance of the withdrawal date cannot, by law, be offset against the s75 debt.  An employer considering this option should take this into account and seek advice where appropriate. 

Further information will be provided in due course, but if any employers would like to investigate this option further, please contact Susan Wardlaw, SHAPS Scheme Secretary, via email at

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