The Plumbing & Mechanical Services (UK) Industry Pension Scheme has announced it is launching a review of its governance structures.

Plumbing Pensions said the aim of the review, which will be carried out with the support of governance consultant Pi Consulting, is to deliver an effective employer representation model and examine the structure and function of the trustee board.

A working group has been established to oversee the project, while key project stages have been identified as a scheme documentation review, an online questionnaire, feedback meetings, reporting, member and employer consultation, and a final meeting to agree any changes.

The scheme, which was set-up over 40 years ago to provide career average retirement benefits to employers and their employees from the plumbing and mechanical services industry, has assets of over £2bn and around 33,000 members.

Plumbing Pensions UK chief executive, Kate Yates, said: “The current governance structure has served the scheme well in the past, but we believe the time is right to review what the scheme needs for the future. This will ensure it continues to serve employers and members in the most effective and efficient ways possible.

“Building stronger communications processes and having in place an effective forum for employers to engage with the scheme is essential for its successful operation in the future. It is also a good opportunity to review how the trustee board operates now that the scheme has closed to future benefit accrual.”

A Plumbing Pensions spokesperson added that the governance structure needed "to be modernised given the size and complexity of the scheme", adding that closing the scheme to new benefit accrual in 2019 had provided "a good opportunity" for a review.

Trustee chairman, Alan Pickering, said: “I am pleased the trustee and constituent organisations have agreed to move forward with a governance review to future-proof the scheme, and enable us to enhance and improve our processes and ways of working.”

The scheme has been attempting to recover Section 75 employer debt, which is equal to departing employers’ share in the shortfall of the scheme on a buyout basis, from around 100 employers, requesting over £1m from some.

In March, Plumbing Pensions submitted a petition to Court of Session in Edinburgh, querying whether it can use scheme funding to cover expenses for recovering section 75 employer debt.

A scheme spokesperson commented: "Section 75 legislation was brought in to protect members benefits and aims to ensure there is enough money in the pension scheme when an employer leaves a multi-employer pension scheme. Since 2005, the Plumbing Pension scheme has been in regular contact with government officials to try and change this law to make it fairer for employers.

"However, it became clear after extensive discussions with government that they would make no further changes to the legislation. The scheme therefore has had no choice but to begin seeking payment of section 75 debts from employers that left the scheme."

Plumbing Pensions is the trustee of the Plumbing and Mechanical Services (UK) Industry Pension Scheme and has no funds of its own, and therefore sought direction on whether it can rely on the indemnity clause in the scheme's rules to cover for section 75 employer debt matters before the hearing was delayed by Covid-19.

Share Story: