When will the Virgin Media fix become law?

It is currently proposed that the new provisions will become law two months after the Bill receives Royal Assent. The Government’s comments in its roadmap document suggest it is working towards Royal Assent by mid-2026.

What will trustees have to do in order to use the fix?

The draft provisions operate in a similar way to the original contracting-out legislation that required actuarial confirmation in relation to proposed amendments (Regulation 42). Trustees will have to request that the scheme actuary consider whether or not the relevant alteration would have prevented the scheme from continuing to satisfy the statutory contracted-out standard that applied at the time of the amendment. The actuary will then have to confirm to the trustees in writing that it is reasonable to conclude that the relevant alteration met these requirements.

How difficult will it be for actuaries to give the necessary confirmation in practice? Can one confirmation be given or will separate confirmations be needed in relation to each amendment?

Actuaries will have to consider carefully whether they can give the necessary confirmations, and we expect their professional bodies will provide guidance to assist and support them in this process.

It may be that actuaries will be able to give confirmation in relation to a group of rule amendments at one time, but the legislation anticipates that confirmation will be given on an amendment-by-amendment basis and so it is likely that some degree of background work and evidence-gathering will be required. Industry practice may well emerge as to what steps need to be taken.

Actuaries may also need legal support  as to the factors that can be taken into account, along with the level and/or quality of evidence or information required before a confirmation can be given. The draft legislation specifies that actuaries may take “any professional approach (including making assumptions or relying on presumptions) that is open to the actuary in all the circumstances of the case” when making their assessment and may act on the basis of the information available, “as long as the actuary considers it sufficient for the purpose of forming an opinion on the subject-matter of the request”.

It will therefore be for the actuary to form this opinion, with assistance from the trustees and other advisers. However, the draft legislation appears designed to give a degree of latitude to allow the actuary to exercise their professional judgment. It also allows the actuary to make reasonable assumptions/presumptions when making their assessment, and this latitude may be helpful where there are gaps in historic data.

Should trustees act now or wait for the legislation to come into force?

The Bill enables trustees to rely on an actuarial confirmation process undertaken before the legislation comes into force provided that it meets the requirements in the legislation. This does therefore provide schemes and employers with the potential to act before the legislation comes into force. That said, the draft provisions could change during the course of the Pension Scheme Bill’s passage through Parliament. We would, therefore, expect that most schemes and employers would prefer to wait until the legislation has come into force (or at least until it is clear that no further changes will be made – for example, once the Pension Schemes Bill receives royal assent) and any actuarial guidance has been published. However, there may be specific reasons why trustees wish to act sooner, and it is helpful that the Bill enables this.

What should trustees do if they have already wound up their scheme or expect to do so before the legislation comes into force?

Helpfully, the draft legislation confirms that, where a pension scheme has been wound up before the legislation comes into force, the scheme will be deemed automatically to have met the Regulation 42 actuarial confirmation requirement, meaning that no separate actuarial confirmation would be required. This is sensible given that many pension schemes which have wound up (some many years ago) would find it very difficult, if not impossible, for any party, including any former trustees, to obtain information and go through the process of obtaining an actuarial confirmation in relation to historic rule amendments.

When will the fix not apply?

The draft legislation provides that, broadly, the fix will not apply to:

• Scheme amendments where legal proceedings were issued on or before 5 June 2025 in relation to their validity under Regulation 42, including where those proceedings have been determined or settled;
• Any amendment where the trustees have notified members in writing that they consider the amendment to be void and that the scheme will be administered as if the amendment had no legal effect; or 
• Any amendment where trustees have taken administrative steps, as a result of considering the amendment void, which have or will have the effect of altering payments to members.

Are there any other developments which could impact things?

There are still some relevant legal questions being considered by the High Court in the Verity Trustees v. Wood case. The Court’s judgment on this case is awaited after the long hearing that took place in February and March of this year, and this could be relevant to the type of amendments which required a Regulation 42 actuarial confirmation.