Virgin Media – what now for pension schemes? 

By PMI Policy and Public Affairs Working Group members Joe Moore, Associate Partner at Aon, and Julia Yates, Chair of Vidett’s Trustee Oversight Board 
   
Amongst the headline-grabbing provisions of DC Value-For-Money, investment mandation and DB surplus release, the Pensions Scheme Act 2026 also provided the industry with a legislative response to the long‑running uncertainty created by the Virgin Media ruling.   

The introduction of retrospective certification for certain historic benefit amendments is a welcome and pragmatic development, as is the accompanying guidance from the FRC and TPR - but it may not be a universal solution, as this article explores. 

A problem the industry couldn’t ignore 

The Virgin Media judgment elevated what might once have been seen as a technical compliance issue into a material and widespread risk. The possibility that historic amendments could be void due to the absence of valid section 37 confirmation raised difficult questions for trustees and sponsors, particularly from some audit firms.  

Whilst many schemes adopted a “wait and see” approach in the hope retrospective relief would indeed be granted, some schemes were prompted to delve into the archive boxes.  Unlike the opening of Schrodinger’s box, however, these investigations often left trustees none the wiser.   

Unsurprisingly, some struggled to locate complete records for changes made decades ago.  An inability to locate the historic confirmation does not mean it didn’t exist though - and trustees have no reason to believe this was not provided when required. 

The result was significant legal uncertainty and potentially material financial implications – Schrodinger’s box was at risk of becoming Pandora’s!  Against that backdrop, the coordinated pressure from the PMI and others across the industry for a legislative fix was both notable and effective.  

What the legislative fix does (and does not do) 

The retrospective certification regime provides a route for many schemes to remediate historic amendments that could otherwise be vulnerable. For many schemes, this is likely to remove residual legal and funding uncertainty, which may be valuable. 

However, it is not a universal cure.  Availability will depend on meeting statutory conditions and applying them carefully to scheme-specific facts. There will also be cases where the easement is not straightforward, which could place actuaries in an awkward position, notwithstanding the pragmatic and helpful guidance released by FRC.  

There are also exclusions, including where positive action has been taken by the trustees in the belief that an amendment is void and where related legal proceedings are already underway. 

Some questions remain unanswered - the judgment awaited in the related Verity case is expected to clarify further points arising from the Virgin Media case (for example, whether certification was required when a scheme closed to accrual).  Trustees and sponsors may continue to “wait and see” for a while longer. 

Trustee considerations and emerging approaches 

It is important that trustees make a positive choice over what they do for their scheme, even if that is “wait and see”. Trustee responses are converging around three approaches.  

Firstly, trustees who have other immediate priorities, who are not undertaking an insurance or other transaction in the short term and have no reason to doubt the existence of the necessary confirmations, the new legislation provides no imperative to go looking for them now.  As helpful as the legislation is, making use of the remedy is still not without cost and effort, so they may continue to “wait and see”, in the hope that judgement in the Verity case will make it possible for any eventual exercise to be a smaller one. 

The second trustee group are those who want to look at this now. Any first steps should be with the support of legal advice and ideally following proactive discussion with the sponsor. The Pensions Regulator’s useful guidance provides trustees with actions they are expected to undertake.  Some will proactively use the retrospective certification simply to remove any uncertainty.  

A third group faces more complex situations – these may be where certification is not straightforward, may be influenced by the Verity case, or requires further analysis. 

Trustees should be able to demonstrate their chosen approach is reasonable, proportionate, and informed by advice.  

Corporate and auditor reactions 

For sponsors, the existence of a legislative solution is clearly positive, but it will not eliminate scrutiny.  Auditors will likely now focus on how schemes respond - including whether retrospective certification is used. 

There is likely to be continued emphasis on evidence and documentation, aligned with broader FRC expectations.  As with trustees, companies will need to demonstrate their position is underpinned by appropriate legal and actuarial input. 

A pragmatic resolution - with nuances remaining 

The called-for legislative response is a welcome development, balancing legal integrity with practical reality. However, it is not a one-size-fits-all solution. 

The industry now has the tools to resolve most issues. The task for trustees and practitioners is to apply them with appropriate judgement and proportionality.