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Shock over £1.2m Plumbing Pensions bill





Murray Menzies.
Murray Menzies.

WHEN Inverness plumber Murray Menzies retired and closed the small business he ran in partnership with his father, it was with relief that he wrote the last pension cheque.

It seemed like a good thing back in 1975 to pay into the multi-employer Plumbing Pensions scheme to ensure his five or six workers had an income in retirement.

But now Mr Menzies (71) has been hit by an eye-watering demand for £1.2 million from Plumbing Pensions and he and his wife Jennifer face the sickening prospect of losing their home and being left penniless if they cannot fight the charge.

Mr Menzies said pension law is so complex, his own solicitor could not help him, and there aren't any pension lawyers in the Highlands.

He said: "I have gone to local MP Drew Hendry and his Perthshire colleague Pete Wishart and they are working hard trying to get something done through parliament. This situation affects other businesses too, and an action group has been set up."

William Menzies and Son had been directed to Plumbing Pensions by the Scottish and Northern Ireland Plumbing Employers' Federation.

Mr Menzies said: "Sometimes it was a struggle making the payments, but we managed. The cheque would be £800 to £1000 a month and I have been contributing for 40 years."

"I got a letter saying I'd triggered a Section 75 debt by retiring. My bill is £1,198,300 and there's no way I can pay it."

Section 75 debts are not debts in the sense of unpaid bills, but were written into pensions legislation as a means of protecting staff pensions in the event of an employer going bust. They require such employers to make lump-sum payments into their defined benefit pension schemes to ensure there is enough cash to meet all their future obligations.

The problem was that anything such as the departure of a company's final employee or the retirement of its owner will trigger a "debt".

Plumbing Pensions boss Kate Yates said it lobbied for an exemption to this employer debt law started by the Department of Work and Pensions in 2005, but were told in 2018 they had been unsuccessful.

She agrees the bills are "big and scary and unaffordable," but unless there is a law change the scheme has no option but to pursue them. There are ways to set aside the debts temporarily, but a small group, including Mr Menzies, cannot access these.

Mr Menzies, whose own pension is about £1100 a month, said: "It is the size of the bill that has come as the biggest shock. People are saying 'Sorry to hear about your tax bill,' but it has nothing to do with tax."


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