Trustees must act quickly to determine whether they can benefit from the government’s amendment for issues arising from the Virgin Media v NTL Pension Trustees ruling, the Institute of Chartered Accountants in England and Wales (ICAEW) has said.

The amendments, published on 1 September as part of the forthcoming Pension Schemes Bill, are designed to address uncertainty created by the Court of Appeal’s July 2024 decision, which upheld a High Court ruling that certain historic amendments to salary-related contracted-out defined benefit (DB) schemes were void unless supported by contemporaneous written confirmation from the scheme actuary.

ICAEW said the proposed retrospective confirmation process “will be welcomed by schemes that took proper steps to amend their rules but now find that key documentation is incomplete or not retained”.

However, it cautioned that the solution is far from universal, with strict eligibility criteria.

Indeed, the mechanism will only apply where trustees took what the government defines as “positive action” to amend scheme rules between 1997 and 2016, and where the amendment would have met the statutory test had written confirmation been provided at the time.

‘Positive action’ includes instances where trustees or managers have notified members in writing that they consider an amendment void and intend to administer the scheme on that basis, or where they have taken other administrative steps that change payments as a result of concluding that an amendment is void.

Notably, this definition specifically excludes preliminary or investigative steps and applies only to cases where trustees have already concluded - and done so validly - that an amendment is void.

Given these limits, ICAEW emphasised that trustees “will need to work closely with their advisers” to understand which amendments fall within scope, what evidence exists or can be reconstructed, and the potential risks in seeking retrospective certification.

It urged schemes to begin preparatory work now, including identifying all potentially affected amendments and reviewing historic governance records.

Under the draft legislation, a scheme actuary will be able to retrospectively confirm that an amendment met the statutory standard at the time it was made, allowing it to take legal effect as initially intended.

Amendments that were defective for other reasons, or that could not have met the statutory test in practice, will remain invalid.

ICAEW also highlighted the wider operational impacts that validated amendments could have, advising trustees to consider implications for funding, benefits administration, member communications and financial reporting.

The mechanism is expected to come into force in the second or third quarter of 2026, subject to parliamentary approval.

The Financial Reporting Council (FRC) has confirmed that it will develop technical guidance to support actuaries undertaking retrospective confirmations, with further detail to follow as the legislation progresses.

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