Daily Mirror (Northern Ireland)
DRAINED BY THE TAXMAN
Devastated plumber facing £2million bill over pension scheme scandal
A PLUMBER is facing a £2million bill to plug a gap in an industry pension scheme there is no escape from.
Gerry Rafferty, 55, is one of hundreds of small-time employers who have been plunged into devastating debt despite paying its contributions to workers.
The Co Armagh man, who works with a 78-year-old business partner, said: “We always did the right thing, paid our bills, our taxes and contributions but now we’re being crushed by a flawed law there is no way out of.”
PLUMBERS in Northern Ireland are being driven into bankruptcy and despair by a pension scheme trap they cannot escape from.
Small-time employers face losing their homes, businesses and anything of value that can be sold to plug a pension gap.
The scandal involves employers who paid voluntary contributions into an industry-wide plumbers’ pension scheme.
But now it is estimated hundreds are saddled with debts of thousands of former workers.
The situation has left Co Armagh man Gerry Rafferty, 55, facing a bill of up to £2million.
He runs Rafferty and Tomany with his 78-year-old business partner Thomas.
He has been a member of the Scottish and Northern Ireland Plumbing Employers Federation for more than 30 years and in that time contributed to the pensions and national insurance of 15 employees and was fully tax compliant.
Now after more than three decades of hard work, his hopes and plans for retirement have been destroyed.
Gerry said: “We’ve always done the right thing, paid our bills, paid our tax, looked after our employees and worked hard.
PRESSURE
“The plan was to retire and enjoy some time with my wife and family away from the pressures of work.
“But for more than a year we’ve been in this terrifying situation where we’ve a huge bill looming and no way to pay it.
“No one can tell me exactly what my debt is calculated as, but it’s estimated to be as much as £2million and no less than £250,000.
“It’s a bill I feel we really do not owe but a technicality that has not been dealt with by Government means by law I’m still liable. I’ve been told there was a time I could have bought out of the scheme for £1 but of course I was told nothing about it.
“There is a hole on the pension pot and people like me, small-time players, are being used to plug it.”
Gerry and Thomas unwittingly triggered what is called a Section 75 in 2010 when their last employee left the company during an economic downturn.
It was seven years before Gerry was notified of the issue when a registered letter arrived at his home.
He said: “It was from Plumbing and Mechanical Services pension scheme and told me I’d triggered a debt in 2017 and telling me to get advice.”
The letter stated: “If you are an unincorporated businesses, i.e a sole trader or partnership, Section 75 employer debt legislation has serious ramifications for both your business and you personally as the owner.
“We strongly encourage you to take professional advice.
“Payment of a debt due to the scheme is a legal requirement. It should be noted the Pensions regulator has wide powers to tackle any perceived avoidance of pension scheme obligations.
“We are currently unable to calculate Section 75 employer debts accurately because of the complexities of applying relevant legislation to the scheme but we want to make you aware of the situation to enable you to take advice.”
Gerry added: “The letter arrived at the end of November and last year’s was a pretty bleak Christmas. We’ve been worried sick.
“Firstly none of it made any sense and then when we calculated an estimate of what we would owe it was overwhelming.
“Where would a man like me get £250,000 never mind £2million?
“We looked for help and there was very little available. We paid money to a fighting fund but we are still stuck in this mess and it doesn’t seem to be getting any better.
“This affects plumbers today but other industries are waiting to see how we get on before they act.
“We’re not getting on very well. I’ve been told of people who have suffered nervous breakdowns and in England I understand a number of people have been driven to the very end of despair and have taken or attempted to take their own lives.
STRESS
“The stress is unreal. My wife has been a fantastic support but the sleepless nights of worry have been devastating. Our entire lives have been plunged into despair and we have no way out.
“It seems very unfair we are facing this. Over the years some of our employees served their apprenticeships and left to set up on their own, and others stayed longer.
“Our last employee left in 2010 because of a downturn in work and despite struggling to survive ourselves, we paid the required redundancy to the workers because it was the right thing to do.
“After paying our last required pension subscription, we are now being targeted to pay more.
“Last November I received the registered letter which blew our world apart.
“It warned our personal and professional assets were at risk and all of a sudden myself and Thomas became victims of these flawed pensions laws.
“And we’re not alone. This situation involves just about every small plumbing firm, many like ours are
family-owned businesses with no limited liability protection with everything to lose.
“I feel we are being ruined financially for doing the right thing.”
In order to stall the huge bill the business partners have been advised to join the pension scheme again.
And as they tried to do this, they discovered they were being watching via Google Maps.
Gerry said: “I got a telephone call from someone who wanted to assess my assets and he told me he had brought our home up on Google Maps and was trying to work out how much it was worth.
“When I explained it was owned jointly by my wife, he said he could see I had a work shed in the garden and he wanted that and my vans as assets.
“I feel like we are being hunted down. I feel desperate. If I join the pension scheme again I’ll never be able to retire because it’ll trigger the section 75. If I die, it will trigger it too leaving my family with the debt.
“I have to work until I die and I can’t even afford to do that.”