Pension Schemes Bill amendments could ease concerns about scheme changes that might otherwise have been void

On 1 September 2025, the Pensions Minister published draft amendments to the Pension Schemes Bill that would enable the retrospective validation of historical amendments to contracted-out defined benefit schemes.

Between 6 April 1997 and 7 April 2016 such schemes were required to obtain written actuarial confirmation that the scheme would continue to satisfy the statutory standard in order for the amendments to be valid.

The proposed legislation delivers an industry-wide remedy, in the light of the Virgin Media High Court judgments over the past two years, for schemes that are unable to produce evidence that the required actuarial confirmations were provided at the time of the original amendment and so would have uncertainty about whether those original amendments were validly made.

Proposed validation process

To retrospectively validate amendments, the following steps are proposed:

• Trustees would request in writing that their scheme actuary assess the past alteration
• The scheme actuary would then confirm in writing that it is reasonable to conclude that the alteration would not have prevented the scheme from continuing to satisfy the statutory standard

Scheme actuaries will be able to take any professional approach appropriate to the circumstances, relying on available information and making reasonable assumptions and presumptions, providing they consider the evidence sufficient to form an opinion. However, the practicalities will need to be considered as the ability to retrospectively certify may not be available or clear cut in all cases.

Automatic validation

Certain amendments will be automatically deemed valid without requiring retrospective confirmation, if, before the legislation comes into force, the scheme:

• Has been wound up
• Came under the responsibility of the Pension Protection Fund, or
• Became a qualifying scheme for the purpose of the Financial Assistance Scheme Regulations 2005

Limitations on retrospective validation

Schemes that have already taken “positive action” in respect of past amendments they have deemed to be invalid (void) will not be able to seek retrospective validation. Positive action includes notifying members that past alterations were void, initiating legal proceedings or taking administrative steps that alter member payments.

The draft amendments are a helpful intervention by the Department for Work and Pensions, which will be welcomed by the industry.