DWP announces legislation plans to remedy Virgin Media uncertainty

On June 5, 2025, the DWP published a statement indicating that it plans to legislate to remedy uncertainty that has arisen following the Court of Appeal’s 2024 judgment in Virgin Media Ltd v NTL Pension Trustees II Ltd. 

As a result of the Court of Appeal decision, certain amendments to the rules of a contracted-out salary-related scheme that did not comply with the regulatory formalities are void. The contracting-out regulations required that the scheme actuary should have been informed of the proposed amendments, should have considered them and then confirmed in writing to the trustees that the scheme would continue to satisfy the reference scheme test if they were made. In some cases, trustees and employers have become aware that the requirements were either not complied with at the time of the amendments or (as in the Virgin Media case itself) the actuary's confirmation cannot now be located.

According to the DWP’s statement, the legislation will "give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards". The DWP hopes this move will provide clarity on member benefit levels for trustees and sponsoring employers. The DWP says that "scheme obligations will otherwise be unaffected".

No further information is yet available about the form of the legislation or the enabling provisions under which it will be made. In July 2024, a joint working group established by the Association of Consulting Actuaries, the Association of Pension Lawyers and the Society of Pension Professionals proposed that regulations should be introduced under powers contained in the Pension Schemes Act 1993. These would permit the retrospective validation of any amendment that is held to be void solely because a written actuarial confirmation was not received before the amendment was made or such a confirmation could not now be located.

Comment

This is very welcome news that the Government has responded to lobbying from the pensions industry to introduce legislation allowing schemes to address the issues arising from the Virgin Media case.

There will be a collective sigh of relief now that DB schemes with a “section 37” problem will be allowed to fix it retrospectively.

We await the details to be set out in regulations.