Plumbers’ scheme set to close to future accrual
On the go: The multi-employer defined benefit scheme for the plumbing industry will close to future accrual from June 30, despite an apparently healthy funding level.
Plumbing Pensions is not sectionalised like many other multi-employer schemes, and has been attempting to recover millions in orphan liabilities, to the consternation of small family businesses and Work and Pensions Committee chair Frank Field.
The scheme’s closure offers the chance to draw a line under the structural problems that have afflicted it without triggering a wind-up debt, but members building up a pension will need to find a new arrangement.
An announcement on the scheme’s website on Thursday said: “After more than 40 years of providing good-value, low-cost pensions to the UK plumbing industry, it has been decided that the scheme will close to future benefit accrual on June 30 2019.
“Plumbing employers must auto-enrol their employees into a different pension arrangement from July 1 onwards.”
While the plan has around £400m in orphan liabilities, it is reportedly fully funded on a low-risk basis.
“The scheme is in a really good financial position, with enough money to pay all the benefits members have already built up,” the announcement continued.
“We plan to write to all the scheme’s members over the summer with an update on the scheme’s latest financial assessment.”
The move was welcomed by the Scottish & Northern Ireland Plumbing Employers’ Federation, which has campaigned for the closure as a way to control costs.
SNIPEF CEO Fiona Hodgson said: “We are extremely pleased the trustee and constituent organisations (SNIPEF, APHC and Unite the Union) have agreed to close the industry pension scheme to future accrual at the end of June.
“The required future contributions for continued benefit accrual are unaffordable, both for the employers and employees," she said. "While closing the scheme does not remove the issue of Section 75 employer debt legislation, particularly for those employers who have already triggered a debt, it does help employers avoid triggering a debt in the future particularly where they have few remaining employees in the scheme."
"The impact of Section 75 has the potential to be devastating for local businesses and the wider community and SNIPEF has been lobbying Government for some time to get the legislation changed."