A RETIRED Inverness businessman who was hit with a £1.2 million pensions bill he has no means of paying has written an open letter to all political leaders ahead of the General Election pleading with them to sort out “iniquitous” pensions laws that have left him facing financial ruin.

Murray Menzies, who ran plumbing firm William Menzies and Son along with his father, has been served with the bill thanks to the way rules that were designed to stop big businesses flouting their pension responsibilities apply to multi-employer schemes.

READ MORE: Retired plumber fears financial ruin over £1.2m pension scheme debt

Under the terms of the legislation, which came into force in 2005, employers severing ties with a pension scheme must pay a so-called section 75 debt to ensure it has enough money to meet all its future liabilities.

With multi-employer schemes like Plumbing Pensions, which Mr Menzies had enrolled employees into since 1975, anything from the departure of a company’s final employee to the retirement of its owner will trigger a debt.

Despite his firm making all the necessary payments on behalf of employees while trading, Mr Menzies’ debt was triggered when he retired and shut down the firm in 2015.

The £2 billion scheme, which has been used by thousands of employers over the years and is fully funded on an ongoing basis, is required by law to chase him for the £1.2m.

Because his business was unincorporated he is personally liable for the full sum and because it is no longer trading he is unable to take advantage of measures that have allowed other businesses to have their own debts set aside.

READ MORE: Only a change to the law can save our members, Plumbing Pensions boss says

In an open letter published in The Herald today, Mr Menzies has pleaded with all political parties to commit to taking action on behalf of him and the other affected businesses. In particular, he is urging them to bring back a bill that was tabled by SNP MP Alan Brown in 2018 and which sought to protect the owners of unincorporated businesses by allowing them to incorporate without triggering a debt.

“The unintended consequences of this legislation and failures by the trustees of the Plumbing Pension Scheme have left my wife Jenny and I facing imminent financial ruin with a £1.2m section 75 bill,” he wrote.

“This is a fate which is also shared by other retired plumbing employers, and which awaits many others, who will trigger section 75 by retiring, ceasing trading, or trying to sell their business.

“Like these other employers, we have paid all the pension contributions properly due to the scheme over the years and it cannot have been Parliament’s intent to bankrupt us through no fault of our own, when this legislation was changed in 2004.

READ MORE: Plumbers' pension crisis: ‘I’ve been unwittingly tied into a debt for life’

“I am but one of hundreds of plumbing employers across the UK who are facing ruin unless changes are enacted as soon as Parliament reconvenes.

“I would appeal to all political party leaders to commit to bringing Alan Brown’s bill back before Christmas, and to fast track it’s progress through Parliament.”

As well as seeking to protect the owners of unincorporated businesses from unlimited liabilities, the Multi-Employer Pension Schemes Bill, which did not make it past the first-reading stage, also sought to change the way section 75 debts are calculated.

Currently, they must be calculated on a buy-out basis, which makes even fully funded schemes appear to have a large deficit, while existing employer-members must also foot the bill for the so-called orphan liabilities left behind by employers that were able to leave the scheme under a different regulatory regime.

READ MORE: MPs call on Government to act over potentially ruinous pension debts

Earlier this year Plumbing Pensions chief executive Kate Yates said she has no appetite to chase business owners like Mr Menzies for section 75 debts but stressed that unless there is a change to the law she will have no option but to comply.

“We’re still pursuing this and hope that some solution will be found, but parliamentary time is being distracted,” she said.

After Mr Menzies’ situation was highlighted by The Herald in October a cross-party group of MPs also called on the Government to take action over the way employer-debt legislation impacts on multi-employer schemes, with the SNP’s Pete Wishart, Liberal Democrat Alistair Carmichael, Tory Kirstene Hair and Labour member Ged Killen all demanding action be taken.