s37 remedy update – January 2026

In September, when we last wrote about the proposed legislative fix to address the effects of the Virgin Media s37 decision, we shared our thoughts on the draft clauses that had been tabled as proposed additions to the Pension Schemes Bill. You can read our commentary here.

The draft clauses were duly approved by the House of Commons and added to the Bill as anticipated. However, on 1 December a series of further amendments to the Bill were tabled for consideration at the Bill’s report stage and third reading. This included proposed changes to the s37 remedy provisions. On 3 December the amendments were approved and on 5 December a revised version of the Bill was published.

What are the changes?

Scope of the remedy

A new provision (clause 100(6)) has been added to confirm that a reference to non-compliance with regulation 42 includes non-compliance with either limb of the certification requirements ((a) trustee written information, and (b) actuarial written confirmation), as well as both.

The member’s explanatory statement accompanying the change is helpful here, confirming that the purpose of the amendment is to deal with “the possibility that the scheme actuary for a GB scheme was notified of a proposed alteration to the rules (so that paragraph 42(2)(a) was complied with) without the confirmation being given”. In other words it is intended to address the situation where the actuarial confirmation was requested by the trustee (by sending the actuary the written information about the change) but either was not given or cannot be found.

The “positive action” exemption

The breadth of the proposed exemption from the scope of the remedy which excludes schemes who have taken “positive action” in relation to potentially non-compliant amendments has been narrowed. Under the amended clause 100(7)(b), the exemption will only apply where members have been notified in writing that the trustees are or will be taking steps in relation to the administration of the scheme that have or will have the effect of altering payments to members or beneficiaries. 

The written member notification element is new, previously “taking any other step in relation to the administration of the scheme in consequence of the trustees or managers considering the alteration to be void” would have potentially taken the amendment outside the scope of the remedy. This is therefore a significant narrowing of what was previously a very broadly worded exemption – now administrative steps taken by trustees in response to a s37 issue that have or will result in changes to payments to beneficiaries are only caught by the exemption from the point where members have received written notification onwards.

The “legal proceedings” exemption

There is helpful clarification of the meaning of the exemption provisions which exclude certain amendments that are the subject of existing legal proceedings from the scope of the remedy. As we highlighted in our September update, the first iteration of the clause raised a number of questions about what the phrase “in issue in legal proceedings” meant.

In the 5 December version of the Bill the provision has been amended, including to add a new definition of “qualifying legal proceedings”. “Qualifying legal proceedings” means proceedings that:

• are brought before a UK court;
• will determine a dispute as to the meaning of the rules of the scheme;
• the trustees or managers of the scheme and one or more scheme members / beneficiaries are a party to.

In the member’s explanatory statement accompanying the amendments when they were put forward, Secretary of State for Work and Pensions Pat McFadden said that “the terms used in subsection (9) [now subsection (10)] are intended to have their usual meaning in the law of England and Wales, or Scotland so that, for example, proceedings before a tribunal or proceedings on a complaint to an Ombudsman would not count”.  This clarification is helpful and a result of the amendments the number of legal proceedings in train as at 5 June 2025 that are caught by the exemption provisions is likely to be much reduced.

Applying the remedy

In clause 101, alongside a couple of small drafting changes, there is a substantive “tweak” to sub-clause (4) which sets out provisions as to the actuary’s approach to a request to apply the remedy. Sub-clauses 4(a) (re the professional approach to be taken by the actuary) and (b) (re the information they may take into account) are reversed.

This is intended to clarify that the consideration of the information by the actuary should happen before they proceed to considering whether to give the confirmation.

In addition, a request “under” subsection 3(a) has become a request “as mentioned in” subsection 3(a). This, we are told, is intended to address the situation where, as the draft remedy envisages, a request is made before the provisions come into force.

Application to public service pension schemes

There are new sub-clauses (8) and (9) in clause 101, which vary the provisions of the remedy to make them work for public service pension schemes (as defined within those sub-clauses).

The member’s explanatory notes state that “the amendment ensures that in the case of a public service pension scheme, things falling to be done by or to the trustees or managers of the scheme under clause 101(3) or (7) are to be done by or to the responsible authority for the scheme. The responsible authorities for public service schemes in Great Britain are identified in Schedule 2 to the Public Service Pensions Act 2013.”

This seems to confirm that the government’s view is that public service pension schemes were subject to the s37 requirements and will need the remedy to be available to them – a line of argument we have highlighted now on a number of occasions. 

Schemes that have wound up or transferred to the PPF or FAS

Clause 102 (dealing with schemes that have wound up and other special cases) is amended to make clear that it applies where a section of the scheme has wound / transferred to the PPF, as well as where the scheme as a whole has so transferred or been wound up.

Timing 

As originally proposed the remedy provisions were due to come into effect two months after the date on which the Bill receives Royal Assent. This has been amended, and the remedy provisions will now come into force on the day the Bill receives Royal Assent.

This change has important implications for a small cohort of schemes who may have been considering winding up in the two month window between Royal Assent and the remedy provisions coming into force. As we’ve highlighted previously, the draft remedy proposes a pragmatic “blanket fix” for schemes that have wound up or transferred to the PPF/FAS, rather than the retrospective actuarial confirmation remedy available to subsisting schemes. 

We had wondered if some schemes might seek to accelerate their wind up processes to take advantage of this, perhaps in the two month window after the Bill becomes law and before the provisions come into force. This window will now no longer exist and schemes considering this route would need to wind up on the basis of the draft provisions, rather than waiting for the position to be certain.

Other changes

There are a number of further minor textual changes.

Equivalent amendments have been made to the corresponding provisions for Northern Irish schemes (Clauses 104-107).

Next steps

As was the case when we last wrote in September, the clauses remain draft and at this stage, for most schemes, the position remains that it is likely to be premature to take any action just now. However, for those winding up or considering winding up in the short term, and for those with s37 issues in legal proceedings, conversations should already be happening with your legal advisors as there may be steps to consider taking as a matter of priority.

The 5 December draft of the Bill has now reached consideration by the House of Lords, with scrutiny by the Committee due to begin on 12 January. It is possible that further amendments to the remedy provisions could be put forward by the Lords, and also that the Lords may reject the provisions as they stand and return them to the Commons for further consideration. So while the Bill is progressing towards becoming law, we are still potentially some way from being able to confirm that the current drafting reflects the remedy provisions in their final form.

As we’ve highlighted before, the final shape of the remedy provisions is a very important part of the s37 confirmation jigsaw puzzle but there are other critical elements that we’re also waiting for. These include the accompanying actuarial guidance as well as the decision in the Verity Trustees v Wood case, where some key questions regarding the scope of the original s37 requirements have been considered. 

If you have any questions at all about s37 compliance in your scheme, please do contact Richard Knight or your usual Burges Salmon contact.