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Employers' Role | Plumbing Industry Pension Scheme

Employers' Role

As an employer in the pension scheme, you also have an important role to play. This ranges from complying with your statutory duties and responsibilities under the Trust deed, to engaging with the Employer Company so we are aware of your thoughts and opinions, as well as complying with reasonable requests from the Trustee for information and compliance.

The engagement we need as the Employer Company is:

  • Participation in consultations we organise so we can assess your opinions; we need to assess what is the opinion of all employers and where we do not have this as a fact, we are expected to infer what would be normal in these circumstances. The more  we can have your opinion the more we hope to reflect what the employer group wants.
  • Employer Company Objectives: these are the high level objectives we have outlined later in the paper. We would be grateful if you could feed back if you agree with our objectives? If not, we would like to understand your view.
  • Valuation exercise; thoughts on where we have got to in our discussions with the Trustee; we expect to do this Q1/Q2 2024.
  • Journey Plan; thoughts and review in connection with the journey plan which will be starting from what do we want to achieve, when by and what does success looks like. For example, we can look at a journey plan which is either based on a set time frame (where we adjust as we go along in order to achieve the deadline) or a journey plan based on when we have achieved a certain level of funding. We expect to consult Q1/Q2 2024.
  • GDPR options; the Trustee needs to decide how they will deal with the GDPR issues within the Pension Scheme. We are in discussions with them at the moment and plan to reach out for consultation in Q1/Q2 2024.
  • Deficit Recovery Plan; even where there is no deficit to recover the Pensions Regulator requires the Trustee to have a plan in place which the Lead Employer must agree to. We are currently working through the proposals made by the Trustee, which are substantially sensible, and we will reach out to you for comments before we agree. The plan is to reach out for consultation in Q1/Q2 2024.

The Trustee is also reaching out to you with regards to certain areas that we cannot help with. The two big areas at the moment are:

Employer VAT Invoices

In order to keep costs down the Scheme is registered for VAT and through an arrangement with HMRC the employers as a group pay the Scheme’s VAT costs. Without this arrangement the Scheme would have a large VAT liability which would be added to its running costs, thereby increasing the likelihood of a deficit recovery plan. For most companies this is a straight in and out but where you are not VAT registered it is an additional cost. The way the VAT is apportioned is based on a ratio of your estimated section 75 debt versus the estimated section 75 debts for all other statutory employers. The estimated 75 debt is used to reflect the size of the liabilities that have been built up by members whilst in your employment. We believe is as fair as it can be in this case. We are aware this cost is one which you may not want to pay but please bear in mind by having this VAT scheme the costs are lower and you are not paying through a deficit recovery approach. The employer VAT invoices were issued in October 2023 and we would encourage you all to pay them as soon as you are able. If the payment does cause you difficulties, please talk to the Administration Company.

Employer Scheme returns

Employers are under a legal duty to provide the Scheme with details of any material significant events that occur. This duty is required at the time of the event but is not always done. The Trustee issues scheme returns each summer and winter, and we would advise all employers to complete these and return them to the Administration Company. Failure to complete and submit a return is a serious issue as well as resulting in the Pension Scheme having to make decisions on incomplete information. Please complete the winter return which will be available from January 2024.

The more insight to employer opinions we have the greater the ability we will have to reflect the expectations of the employers.