Put simply, a Flexible Apportionment Arrangement (“FAA”) is a legal agreement which transfers pensions liabilities in the Scheme from one employer to another.
A valid FAA will mean the previous employer (“employer A”) does not have to pay a Section 75 employer debt as the liability is passed to a different employer (“employer B”). Employer B has to both agree to and have the ability to take on employer A’s liabilities.
For further information about FAAs, the Pensions Regulator’s website has a section dedicated to multi-employer schemes.