Part 3: The Pensions Regulator Contribution notices where avoidance of employer debt etc Section 103: Grounds for issuing a section 38 contribution notice S38C: Section 38 contribution notice: meaning of "employer insolvency test"
Subsection (1) of new section 38C, the "employer insolvency test", enables the Regulator to issue a contribution notice where it is of the opinion that:
	immediately after an act, or failure to act, the value of the assets of the scheme was less than the liabilities of the scheme, and
	if a debt under section 75(4) of the Pensions Act 1995 had fallen due immediately after the relevant time, the act or failure to act would have materially reduced the amount that could be recovered by the trustees or managers from the employer in the case of a hypothetical insolvency of the employer.
	Subsection (2) sets out that the value or amount of (i) the assets of the scheme, (ii) the liabilities of the scheme, and (iii) the debt that would have fallen due under section 75(4) of the Pensions Act 1995, will be the Regulator’s estimate as at immediately after the relevant time.
	Subsection (3) states that when estimating the value and the amounts referred to in subsection (2), the Regulator must take into account how the liabilities and assets and their value or amount of the employer are determined and calculated for the purposes of section 75(4) of the Pensions Act 1995.
	Subsection (4) provides that any debts due under section 75 of the Pensions Act 1995 immediately after the relevant time are to be disregarded for the purpose of the test.
	Subsection (5) defines "the relevant time".