Virgin Media And Section 37: What Steps Do Trustees Need To Take Now In Light Of Upcoming Pension Schemes Bill Remedy And TPR Guidance?

Background

Where certain alterations were to be made to the rules of occupational pension schemes that were contracted out between April 1997 and April 2016, Regulations made under section 37 of the Pension Schemes Act 1993 provided that the scheme actuary had to be satisfied that the scheme would continue to meet the relevant statutory standard after the change had been made and confirm this in writing (known as a section 37 confirmation or certificate) before the alteration could be made.

In Virgin Media Ltd v NTL Pension Trustees II Ltd case, the High Court and Court of Appeal held that where schemes failed to obtain the required section 37 actuarial confirmation for any relevant alterations, those alterations were void. See our previous articles for more information about the High Court and Court of Appeal judgments.

The decisions in Virgin Media cast doubt over the validity of a wide range of historic scheme amendments and created significant uncertainty for trustees and employers across the pensions industry. In response to these concerns, the Government has brought forward provisions in the forthcoming Pension Schemes Bill intended to provide a statutory route to address the consequences of the decisions.

This article summarises the remedy available under the Pension Schemes Bill, the next steps for trustees of affected schemes to take and the expectations of the Pensions Regulator (TPR).

Pension Schemes Bill remedy

The Bill provides that a "potentially remediable alteration" will be treated as having met the relevant section 37 requirements (even in the absence of actuarial confirmation at the time) and is to be treated as having always been a valid alteration if the following conditions are met:

• The trustees have made a written request for the scheme actuary to consider whether the alteration would have prevented the scheme from continuing to satisfy the reference scheme test, and
• The scheme actuary has provided written confirmation to the trustees that it is reasonable to conclude that the alteration would not have prevented the scheme from continuing to satisfy the reference scheme test.

The Financial Reporting Council (FRC) issued guidance in January 2026 to support actuaries in applying the remedy and explaining how to approach the tests described above.

An alteration will be "potentially remediable" under the Bill if the following conditions are met:

• It could not be made unless the relevant statutory requirements (as they then had effect) had been met;
• The trustees treated it, after it was purportedly made, as a valid alteration;
• The trustees have not taken any positive action on the basis that they consider the alteration to be void by reason of non-compliance with the relevant statutory requirements, and
• It is not excluded from the scope of remediation. An alteration will be excluded if any question relating to the validity of the alteration has been, or is, the subject of legal proceedings commenced on or before 5 June 2025 to which the trustees and at least one beneficiary were or are a party.

It is important to note that the remedy cannot be used to validate any amendments that are invalid for any reason other than a lack of a section 37 confirmation (such as any amendments that are invalid due to non-compliance with the scheme's amendment power).

Next steps for trustees to take

If the scheme has wound up before the legislation comes into force

In these circumstances, any potentially remediable alteration is to be treated as having met the relevant statutory requirements and so as having always been a valid alteration as far as those requirements are concerned. Trustees of such schemes do not need to take any further action.

If the scheme has not wound up before the legislation comes into force

If they have not already done so, trustees of schemes in these circumstances will need to establish whether their scheme is affected by the Virgin Media judgments. This will involve a review of historic alterations to the rules that make either positive or negative changes to benefits (in deeds, resolutions, announcements etc.) to determine whether section 37 confirmation was required and, if so, whether such confirmation had been obtained. Further clarity as to the scope of alterations requiring section 37 confirmation is expected in the long-awaited judgment in the Verity Trustees v Wood case. This judgment could therefore have an impact on which alterations are caught by the section 37 requirements. 

If confirmation cannot be located easily, trustees should balance the cost and practicality of finding evidence of such a confirmation against a decision to move directly to using the remedy available.

If it is identified that the scheme does have historic amendments that are affected, trustees will need to decide whether to use the remedy available under the Bill. This is likely to require advice and information from your legal adviser, actuary and administrator as to the most suitable course of action.

TPR has recently published guidance for trustees on the use of the remedy. This guidance confirms that trustee boards that decide to use the remedy will need to provide their current scheme actuary with a formal written instruction to carry out the work required to provide the historic confirmation needed. This should include a scope of work that identifies the following:

• The alterations your actuary is to consider, and
• Where multiple alterations occurred at the same time, (e.g. in a single deed of amendment) whether your actuary can consider the overall effect of all these alterations together, or consider each alteration individually, or a combination of both approaches. A new trust deed and rules may have contained substantive amendments even if it is called a consolidating deed and these will need to be identified.

Trustees will likely need legal assistance to draft this instruction to ensure that the correct questions are asked of the actuary.

The remedy will not come into force until the legislation receives Royal Assent, however TPR's guidance states that trustees can provide written instructions to the scheme actuary to make a start on the work now. 

The guidance highlights that, in some cases, identifying whether an alteration would not have prevented the scheme from continuing to satisfy the statutory standard will be straightforward due to the nature of the alteration itself. However, in some circumstances this may be more complicated and actuaries may need further evidence. Trustees will therefore need to be prepared to find such evidence where necessary and may require engagement with sponsoring employers (past and present), administrators and historic advisers (where applicable).

If after consideration the actuary cannot provide the required retrospective confirmation, trustees should seek legal advice on the appropriate next steps to take. Consideration should also be given as to how any void amendments could impact the scheme's funding position. 

The Bill does not set a deadline for using the remedy available, however this is likely to be determined by the circumstances of each scheme (for example, if a scheme is starting a buy-out process, it may be beneficial to proceed with this work urgently to mitigate the impact on the buy-out timescale where possible). Trustees should consider this in the context of their own scheme and discuss this with the scheme's sponsoring employer who may have a view.

If trustees decide not to proceed with remediation work immediately, care should be taken to avoid the destruction of any relevant records that could assist with this work in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.