Scots MP warns of plumbers’ pensions liability “ticking time-bomb”

Pete Wishart
Pete Wishart

A £1.5 billion pension scheme is a ‘ticking timebomb’ of debts and liabilities for the plumbing profession, an SNP MP has told the House of Commons.

SNP MP Pete Wishart highlighted the massive debts and liabilities faced by plumbers across the UK at a Westminster debate and welcomed assurances from the UK Government to resolve the issue.

Plumbing Pensions (UK) Ltd was established in 1975 to provide pensions for the Plumbing & Heating Industry UK wide and has over 36,000 members and assets in excess of £1.5 billion.



Under section 75 of the Pensions Act 1995, employers can become liable for what is known as a section 75 employer debt if they wish to retire or to wind up their business. The debt is calculated on a “buy-out” basis, which tests whether there would be sufficient assets in the scheme to secure all the members benefits by buying annuity contracts from an insurance company.

For many plumbers – with very small businesses employing one or two other people – this employer debt is crippling and has caused some individuals to face the prospect of losing their homes and life savings.

Pete Wishart, MP for Perth and North Perthshire, said: “Many plumbers have been unaware of this ticking time-bomb, busy getting on with their work of fixing our heating or ensuring our washing machines work and it is vital that we look at all the options to resolve this matter.

“So many plumbers are being caught up in the unintended consequences of the measures included in Section 75 of the 1995 Pensions Act, where employers can become liable for a section 75 “employer debt”.

This means that many plumbers wishing to wind up their business has to accept the employer’s share of the shortfall in the scheme on a buy-out basis based on the hypothetical situation that the whole pension scheme is wound up and had to buy annuities for all its members.

“I am pleased that after the SNP highlighted this unfair situation that the UK Government has committed to looking carefully at this issue and I look forward to seeing what proposals they bring forward.”

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