Government to legislate to address issues arising from the Virgin Media s37 decision

The Government has confirmed today (Thursday 5 June) that it is going to legislate to address the effect of the Virgin Media section 37 decision.  

To recap, the decision relates to the impact of missing actuarial confirmations that historic amendments to scheme rules continued to meet contracting-out standards (more detailed background set out in our September 2024 briefing here).

In a significant development, and a move that will no doubt be welcomed by schemes across the board as well as the wider pensions industry, today’s press release confirms that legislation will be introduced “to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards”.  You can read the full text of the press release here:

https://www.gov.uk/government/news/retrospective-actuarial-confirmation-of-benefit-changes?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=1daa7c56-be0f-49dd-ad23-c3f83abb8524&utm_content=immediately

Schemes will doubtless be asking themselves and their advisers whether this is the silver bullet that solves any and every issue arising from the decision – for that we’ll have to wait and see as clearly the detail is to follow. For example, where evidence of confirmation is missing there will still be decisions to be made about whether the confirmation was needed at the time (not always straightforward to establish), and whether the retrospective confirmation can be given now. 

But what we can say at this stage is that today’s announcement is very clearly a positive step in the right direction, with a clear intention expressed by Government to allow schemes to retrospectively obtain the necessary actuarial confirmation that the amended scheme rules continued to meet the reference scheme test (as required by section 37 of the Pension Schemes Act 1993 and Regulation 42 of the Contracting-out Regulations 1996). 

Of course, there will be much to unpick as further details of the legislative changes become clear.  Look out for further updates from us in the coming days and weeks, and please do get in touch with your usual Burges Salmon contact if you have any questions about today’s announcement.