Alan Pickering CBE added as a Defendant to summons against Plumbing Pensions Trustees

November 10, 2021
Parminder K Latimer


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gunnercooke Pensions Partner Parminder K Latimer, advising Kamco Limited in relation to a £265,000 claim against Plumbing Pensions Trustees (see article dated August 3, 2021), has recently had the summons amended against Plumbing Pensions Limited, to add Alan Pickering CBE, the former Chair of Plumbing Pensions Trustees, as a Defendant. Alan Pickering has subsequently been served and service has been accepted.

The amended summons argues that:

Alan Pickering was aware of the way the Plumbing Pensions Scheme was administered and that Plumbing Pensions Trustees was wilfully failing to comply with its obligations in relation to the section 75 employer debt.

Alan Pickering knew PPT was actively encouraging new employers, such as Kamco who joined the Scheme in early 2014, to join the Scheme and thereby the employers would be exposed to the risk of incurring section 75 liabilities and consequential losses.

As a Professional Trustee and the Chairman of the Plumbing Pensions Trustee Board, he had duties to potential new employers, to take steps to ensure before joining the Scheme new employers were made aware that they could be exposed to section 75 employer debt liabilities. He failed to do so. He also exasperated the maladministration of PPT, by allowing the Scheme to remain open to new employers in early 2014, so that Kamco became a participating employer of the Scheme, and became straddled with a s75 debt in the region of £265,000. At the same time the Pensions Regulator had already issued communications to PPT highlighting that the s75 risks should be communicated to potential new employers before they participated in the Scheme, no such “warning” was given to Kamco.

Kamco relied on the representations of PPT that the Scheme had been properly administered. At no time during the discussions leading up to Kamco joining the Scheme, was Kamco informed the Scheme that Kamco would be liable for mounting orphan liabilities and a s75 debt which could result in a loss. PPT was aware of this since 2005 on the change of s75 employer debt regulations. PPT had a strategy to “recruit” as many employers as possible so the employers could pay for the funding gap.

Alan Pickering knew if a claim were to arise, PPT had no assets to defend such s75 claims, and such claims were uninsured, therefore Kamco would potentially have no remedy against PPT.

If PPT and Alan Pickering had complied with their duties, Kamco would have not participated in the Scheme. Kamco would have made alternative DC pension provisions for auto-enrolment purposes in early 2014, whereby its employer contributions would have been significantly less than the contingent s75 liability.

Parminder K Latimer commented: “Whilst most of the Board of PPT were or are lay members, Alan Pickering, has been a Board member of Plumbing Pensions Trustees for over 40 years. He served as a Chairman for 20 of those 40 years and is a Professional Trustee. He is a former non-executive director of The Pensions Regulator, he was the chairman of BESTrustees until recently, becoming its President. Whilst not absolving the other Board members of their part, they would have looked to Alan Pickering for directions, advice and guidance. He has the knowledge, and a duty of care to understand how the Scheme was run and he had the knowledge of the inherent risks a new employer joining the Scheme, such as our client Kamco, would incur. He would have known there was a potential risk of claims from employers and that PPT had no assets to defend or payout on those claims. Instead he sanctioned actions for PPT to pursue changes to the s75 legislation, which failed, by which time it was too late for our client, and many other employers, who had already become participating employers of the Scheme and so, “on the hook” for their share of the s75 debt.”

Parminder K Latimer is one of eight Pensions Partners at gunnercooke, making the team one of the largest specialist teams in the UK due to its significant growth in 2020. Parminder has recently been shortlisted as a one of four finalists for Lawyer of the Year at the Women in Pensions Awards, and the team shortlisted for Pensions Lawyers of the Year at the UK Pensions Awards. gunnercooke is a full-service commercial professional services firm, founded to change the way legal services are delivered to clients and how lawyers balance their lives. The firm’s innovative model sees 268 partners with a minimum 10,000 hours practicing experience becoming trusted advisers to their clients, providing certainty of price and delivering the best quality advice. The firm has seven offices across the UK and Germany.