Governance Consultation

We are considering making changes to the governance structure of the Plumbing & Mechanical Services (UK) Industry Pension Scheme (the Scheme).

The proposals do not have any impact on the benefits that you or your employees have in the Scheme. They only affect how the Scheme is managed in the future.

The Scheme was set up in the 1970s and the governance structure is largely unchanged since then. While it has served the Scheme well for many years, it needs modernisation to reflect the current business environment and governance best practice to make it fit for the future.

The Trustee, two employer trade associations (SNIPEF and APHC) and Unite the Union that jointly agree the Scheme’s rules, together asked Pi Consulting, an independent firm, to review the Scheme’s governance structure.

The overall objective of the review was to establish a transparent and efficient decision making structure which has clear lines of communication and avoids conflicts of interest.

Pi looked at how the Trustee Board operates, how employers are represented and the role of the Administration Company, and recommended changes to improve how the Scheme works. The Trustee, employer trade associations and union spent time considering Pi’s recommendations and how they might be implemented and work in practice.

This employer leaflet and member leaflet explains the proposals and looks in more detail at the background to the review and the reasons behind the proposals. We plan to implement most of Pi’s recommendations.

We would like your feedback on the proposals. Information on how to send us your feedback can be found on the Consultation Questions tab. 
Please send us your comments by 14 January 2022.

1. Do you agree with the proposed changes to the Trustee Company? If not, which proposals don’t you agree with and why?
2. Do you agree with the proposals to establish a new Employer Company? If not, which proposals don’t you agree with and why?
3. Do you agree with the proposed changes to the Administration Company? If not, which proposals don’t you agree with and why?
4. Are there any other changes you would like to see?
5. Would you like to register an interest to join the Board of the Employer or Trustee companies?

Please let us know your views on the proposed changes here.

1. Why are you changing the Scheme’s governance structure now?

After the Scheme closed to new benefit accrual in 2019, everyone involved with the Scheme decided it was a good opportunity to review how the Scheme operated to make sure the structure was appropriate, meets modern business and governance practices and is fit for the future.

2. How was Pi Consulting chosen?

Seven governance review specialists were invited to submit proposals, which the Trustee, APHC, SNIPEF and Unite considered. Various meetings were held to meet the shortlisted candidates and discuss their proposals. Pi Consulting was selected following this process because it was felt that they offered the best proposal.

3. How did Pi Consulting conduct their governance review?

Pi Consulting:

• Reviewed key Scheme documents.
  • Observed a Trustee Board meeting.
  • Issued online questionnaires to 29 people linked to the Scheme, including Trustee Directors, representatives from APHC, SNIPEF, Unite and PEAG (the Plumbing Employers Action Group), a range of employers and senior employees from the Administration Company.
  • Conducted 26 individual interviews with people connected with the Scheme.
  • Carried out three group interviews.
  • Presented their findings to the Trustee Board and Constituent Bodies

4. Who paid Pi Consulting to carry out the governance review?

The cost of the governance review was shared by the Trustee, APHC, SNIPEF and Unite.

5. Will all of Pi Consulting’s proposals be implemented?

No, not all of them were considered appropriate for the Scheme to implement. There were some areas where the Trustee and Constituent Bodies did not believe Pi Consulting’s recommendations should be accepted.

6. What will happen to APHC, SNIPEF and Unite in relation to the Scheme?

APHC and SNIPEF will initially have one representative each on the Employer Company, under the current proposals. The Employer Company has been designed to look after the interests of all employers, not just members of APHC and SNIPEF.
Unite will retain an active role in relation to the Scheme as its consent is still needed for rule amendments. Unite will also appoint two of the Directors of the Trustee Company.

7. What will happen if members or employers disagree with the proposals?

This is a genuine consultation – we really want to hear your views. If you don’t agree with the proposals, please tell us why not and what you think we should do instead. All the feedback will be considered before a final decision on how to proceed is made. Any changes to the proposals will need to be agreed by the Trustee, two employer trade associations and union.

8. What is the implementation timeline?

After the consultation closes in January 2022, the Trustee and Constituent Organisations will review all the feedback received and decide whether to make any changes to the proposals.  We hope to make a final decision on how to proceed in March 2022 so the changes can be implemented in spring 2022.  We need to agree new documentation to set out how the Trustee Board, Employer Company and Administration Company will work and we need to recruit and appoint directors to fill the new posts.  We hope that the new structure will be up and running by the end of summer 2022.

9. Who will pay for the extra cost of the new structure? 

The proposals assume that the Scheme will meet the extra cost.  We believe the new governance structure will allow better decisions to be made in a timely manner and therefore the extra cost is justified.  There will be strict guidelines for what is acceptable expenditure and tight to control cost.

10. Why are the terms of office 4 years?  Isn’t that too long?

We believe four-year terms of office are appropriate because the main tasks of running a pension scheme are repeated every three to four years.  A director can resign at any time if their employment or personal circumstances change.

11. Will the new directors receive training?

Yes.  We plan to run training sessions for all the new directors to help them understand how the Scheme works and their role and responsibilities.

12. What does the Pensions Regulator think about the governance review?

The Pensions Regulator supported the governance review. The Trustee has kept the Pensions Regulator informed of progress throughout the process.