A GROUP made up of almost 50 independent plumbing businesses has hit out at the trustees of a £2 billion industry pension scheme, calling their handling of a long-standing and potentially ruinous debt issue “a complete dog’s breakfast”.

The multi-employer Plumbing & Mechanical Services (UK) Industry Pension Scheme (Plumbing Pensions) is in the process of writing to 200 plumbing business – 100 of which are based in Scotland – informing them of their obligations to pay so-called Section 75 debts dating back 14 years.

READ MORE: Plumbers asked to pay potentially ruinous pension debts

Due under legislation introduced in 2005, the debts are designed to ensure defined benefit pension schemes have enough money to pay members’ full pension entitlement. In the case of the plumbers’ scheme they have been triggered each time a contributing employer has wound up or changed ownership structure, or when they no longer have any employees contributing to the scheme.

However, as the Edinburgh-run pension has not until now sought to collect any of these debts – some of which could amount to several million pounds - the Plumbing Employers Action Group has accused its trustees of failing in their duty to members.

“Section 75 was introduced in 2005 but the trustees failed in their duty to act by not collecting those debts and allowing a number of employers to leave in the intervening years without collecting any debts,” said group spokesman Garry Forster.

“They provided no information or assistance to employers on the circumstances when they may have triggered a Section 75 debt until they sent out a communication in 2016 saying this was an issue and they were going to pursue it.

“Our members have been worried sick about this because they have no idea what size their debt might be and they face the potential of losing not only their businesses but their homes and pensions as well because in many cases this is a personal liability.”

In answer to a Freedom of Information request received last year, The Pensions Regulator confirmed that Plumbing Pensions first sought clarification about how the Section 75 legislation should be applied to the scheme in November 2005.

Despite this, the trustees took the view that as the scheme, which was set up in the 1970s, held information on individual members as opposed to their employers, it would have cost more than it was worth to calculate and collect the debts.

READ MORE: Plumbers asked to pay potentially ruinous pension debts

The scheme’s chief executive Kate Yates said: “When the legislation changed it was very difficult for the trustees to get the data needed to do the calculations and difficult to come up with a calculation method that was fair. The trustees thought the cost to do it would be disproportionate and they spent many years lobbying the Government to try to get the law changed.”

After the regulator said in 2014 that neither a change to the law nor a special exemption for the plumbers’ scheme was likely, Plumbing Pensions began the process of gathering the data required to calculate individual employer debts.

Currently 350 businesses contribute to the 35,000-member scheme - 160 of which are based in Scotland – although around 4,000 have used it over the years.