The Pensions Regulator (TPR) issued warning notices and fined an accountant in its efforts to secure a section 75 debt payment from a company exiting the £1.2bn Plumbing & Mechanical Services Industry Pension Scheme.
The regulator has subsequently warned other companies in the multi-employer scheme against trying to walk away from pension debts.
Cliden Construction became liable for a section 75 payment when its last active member of the Plumbing Pension Scheme left in 2019. However, it did not pay this bill and entered liquidation in 2023 with the debt still unpaid.
In the intervening period, TPR reported that the company and other parties had “taken a series of steps” to avoid paying its debt to the pension scheme, including paying dividends instead of settling the section 75 bill.
TPR intervened, issuing a warning notice, and eventually reached a settlement with a former director of Cliden Construction and a “related company”, according to a press release from the regulator. Funds have now been paid into the scheme. It also fined the company’s accountant for “failing to comply with statutory information requests”.
The Plumbing Pension Scheme had approximately £1.2bn in assets as of April 2025, according to its latest annual report, and the regulator said the scheme had a deficit of around £258m. This shortfall means exiting employers must make a final contribution towards the deficit, and if they do not, the liability falls to the remaining employers.
Gaucho Rasmussen, executive director of TPR’s enforcement and legal group, said: “While we aim to prevent harms through constructive engagement, we will not hesitate to use our enforcement powers where necessary to secure positive outcomes and as a deterrent against this type of behaviour.
“We will continue to work together with the trustees of the plumbers’ scheme to ensure that employers understand the importance of paying their debts to the scheme and the potential consequences of not doing so.”
It is not the first time the Plumbing & Mechanical Services Industry Pension Scheme has been involved in section 75 debt disputes. As many of the scheme’s employers are small, unincorporated companies, section 75 debt bills can be substantial and have been previously described as “crippling” for company directors.
The pension scheme overhauled its governance in 2020 after receiving criticism for its handling of these “orphan liabilities”.
