Highlands & Islands Labour MSP David Stewart has secured cross-party working to win support in the Commons for a change in the law in his bid to save a 71-year-old city plumber from financial wipe out by a pension scheme.
Mr Stewart has won the backing of Moray MP Douglas Ross who has agreed to use his new role as Parliamentary Under Secretary of State at the Scotland Office to act as a liaison and make good connections with other UK Government departments.
It comes after Murray Menzies was issued with a shock estimated bill for £1.2 million by the Plumbing & Mechanical Services (UK) Industry Pension Scheme.
The bill was generated because the pension scheme has a legally-binding requirement to issue “debt notices” to those who have left or retired, or have changed the structure of their business.
This legally-bounding requirement was brought in with pension reforms introduced in and around the 1990s following pension fund scandals.
The reforms brought in strict rules with what would appear to be unintended consequences for multi-employer schemes like Plumbing Pensions and individuals who have paid into it.
And now Mr Menzies, along with others who have left the scheme, are being told they are liable to pay astronomical sums.
Mr Menzies said he and wife Jennifer have been “stuck in a bad dream” since the estimated bill landed on their doormat in 2018.
Mr Stewart was appalled when he heard of Mr Menzies’ plight.
He was searching for levers within the Scottish Government to help Mr Menzies but was told none existed.
With the ultimate aim of pressuring the lawmakers in Westminster to make changes to The Pensions Act, Mr Stewart approached Conservative Moray MP Douglas Ross, the new Parliamentary Under Secretary of State at the Scotland Office.
He has also secured talks in Whitehall with UK pensions minister Guy Opperman.
Mr Stewart said: “I met with Kate Yates, the chief executive of Plumbing Pensions last month and she was saying she was absolutely certain that the pensions reforms never intended to so harshly punish people by sending them extortionate bills just for paying into a pension scheme for their workers. It’s a scandal and I’m looking at The Pensions Act to try to resolve this unintended consequence. But it is really positive that MP Douglas Ross has agreed to a cross-party approach. I know, from my own experience as a Parliamentary Private Secretary for Alistair Darling in my MP days that Mr Ross will be a good advocate who can make connections with other UK Government departments and act as a liaison.”
The £1.2 million pension “debt” served on Mr Menzies is equal to his share of the shortfall in the pensions scheme on a ‘buy-out’ basis.
The sum includes an allowance for the estimated expenses that would be incurred in the hypothetical situation that the scheme decided to wind up and buy annuities for all the members.
Mr Menzies’ share of the shortfall is based on the benefits accrued by each member whilst employed by him at his firm William Menzies and Son, based on Academy Street in Inverness.
He said saw no signals in the seventies, when he signed up to it, that it had the potential to leave him penniless. He thought his decision to retire and close his plumbing business in 2015 would end his association with the scheme. However, three years later, he received the shock demand in the post.
He is now angry with the pension’s trustees, saying they should have told him about the consequences sooner.
“They were sitting on this information for about 14 years and they did not inform anybody,” he claimed.
“They could have told me there was a way of protecting myself, because I could have protected myself by changing my business from a partnership to a limited business. Thos is having a devastating toll on myself and my wife. It’s hard to sleep at night. It feels like we’re stuck in a bad dream. We need all the help we can get.”