Update on the Virgin Media decision

We reported in July 2024 that the Court of Appeal had upheld the High Court decision in the Virgin Media case. This means all amendments to contracted-out DB schemes between April 6, 1997, and April 5, 2013, do need written actuarial confirmation that the reference scheme test continues to be satisfied, as required by section 37 of the Pension Schemes Act 1993.

It follows that amendments could be void whether they related to past or future service benefits, even where such changes were benefit improvements.

What form should the confirmation take?

There will be an issue for schemes that cannot find confirmation, or clear evidence that it was obtained at the time of the amendment. However, the confirmation need not be in the form of a certificate, but it must be in written form. A letter, an email or a deed recital saying that confirmation has been given could be enough to show that the requirement has been satisfied, if no certificate can be located. It is not possible for the actuary now to give retrospective confirmation.

What might happen next?

We understand that Virgin Media has not sought leave to appeal further.

While the DWP has the power to validate scheme amendments retrospectively, there has so far been no clear indication from the government that this solution will be adopted.

A joint statement has been issued by the Society of Pension Professionals, the Association of Consulting Actuaries and the Association of Pension Lawyers confirming that they have made a proposal to the DWP regarding a possible intervention to the required regulations.

Without such DWP action, the ramifications of calling into question past amendments are likely to produce a huge workload for scheme administrators and potentially additional liabilities for Schemes.

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