Inverness Plumbers Outrageous £1.2 Million Pension Bill

David Stewart (right) pictured with Murray Menzies.

An Inverness plumber fighting an “outrageous” £1.2 million pension bill said his spirits soared this week after another plumbing firm commenced court action against the Scheme.

Murray Menzies and around 29 other unincorporated retired plumbers have been served with estimated financial demands from the £2.2bn Plumbing and Mechanical Services (UK) Industry Pension Scheme.

The demands, which ask employers to provide the full buy-out cost of their own and other employers’ liabilities, have in many cases threatened to financially ruin the recipients.

Mr Menzies (72) is appealing, with support from Highlands & Islands Labour MSP David Stewart, for changes to be made to the “flawed” legislation which he says is driving these debt notices known as Section 75 debt notices.

However, Pensions Minister Guy Opperman, who has overall responsibility for changing legislation, has said amendments cannot be made anytime soon.

It remains his heavily disputed argument that any such move could risk the scheme’s assets and jeopardise the pensions of remaining members in the scheme.

But news this week a yet-to-be-named company is gearing up to do battle with the pension scheme has given Mr Menzies and others contesting their bills “a glimmer of light at the tunnel”.

Mr Menzies said:

“I have paid every penny that I was required to pay into to this pension scheme.

“It cannot have been Parliament’s intention when passing the legislation driving these flawed Section 75 demands to bankrupt ordinary employers who have done nothing wrong.”

The trustees of the Plumbing and Mechanical Services (UK) Industry Pension Scheme last year began issuing estimated debt notices.

Several plumber employers have written letters of complaint to the scheme over its handling of Section 75 employer exit debts, which the scheme only began collecting in 2019 despite regulations requiring their collection from 2005.

And now, one employer has raised proceedings against the scheme, seeking declarator that “no Section 75 debt is due”.

Mr Stewart, who took up Mr Menzies’ case late last year and scheduled talks in February with the Pension Minister and officials in Whitehall, said it was immeasurably difficult to find a way out for Mr Menzies – but it was a “scandal” and his support for Mr Menzies and others would go on until a way out was found.

He is writing again to Mr Opperman this week asking him to consider, at a time when Parliament has emergency powers due to the Covid-19 pandemic, a Moratorium on the Enforcement of the Section 75 debt notices.

He will argue “a delay of several years, say five, might allow an oversight to be corrected”.

He said:

“I am really concerned for Mr Menzies and all the other plumbers whose lives are on hold and future bleak because of this legislation.

“A huge amount of sympathetic agreement exists for their plight but this legislation is still being enforced.”

Mr Stewart has written to Mr Opperman repeatedly on the issue as well as the Pensions Regulator, and various poverty action groups and others.

He has also held meetings with the Pension Scheme CEO Kate Yates who is also unable to offer some resolution.

He said he was disappointed with Mr Opperman’s latest reply to his plea for an easement for Mr Menzies and the others.

Declining the MSP’s invitation to meet with Mr Menzies and other affected plumbers in the constituency, a section of Mr Opperman’s reply said:

“Due to both the COVID-19 impact and the Pensions Scheme Bill going through Parliament, I am unable to make that commitment”.

He said he sympathised with Mr Menzies but all measures to find a way out for him had failed, but he could repay the huge debt, if and when it is officially served upon him, in “instalments”.

He also confirmed Mr Menzies and the others had “to all intents and purposes met their responsibilities towards the scheme and paid contributions as and when they became due”.

However, he insisted if they were to be released from their Section 75 debts, a precedent could be set jeopardising the scheme for the remaining employers in the scheme.

This is contested by the Plumbing Employers Action Group (PEAG), which is campaigning against the legislation.

This group claims the pension scheme Trustees “publicly stated they were only expecting to collect 10 per cent of the Section 75 debts due, under which circumstances, these small sums are immaterial to a scheme with total assets of £2.2bn.”

Mr Opperman’s letter is being met with a blistering reply from Mr Menzies.

Mr Menzies’ letter, which Mr Stewart has agreed to pass on to the minister this week, says:

“When an unexpected bill of a million quid lands on your doormat there’s not much left that can surprise you – except maybe when the minister with overall responsibility for waving it says ‘hey, don’t worry, it’s okay, we’ll let you pay it back instalments’.

“I would ask you Mr Opperman, where does a retired 72-year-old, whose only income is his state pension, find the money to pay off the outrageous sum of £1.2 million, even in instalments?”

He added:

“Thank you for your sympathy but it isn’t going to save me from losing my family home nor from the financial ruin that awaits us.”