Virgin Media remediation for UK defined benefit pension schemes

Recent developments following the Virgin Media judgments have sharpened focus on how trustees should respond in a way that is proportionate and robust. In particular, the 'Virgin Media' clauses in the Pension Schemes Act 2026 ("PSA26") provide a practical route forward for many schemes.

PSA26 allows trustees to ask their scheme actuary to provide retrospective confirmation in most circumstances that will address the legal uncertainties arising from the Virgin Media judgments. This briefing summarises the latest guidance from the Pensions Regulator (TPR) and the Financial Reporting Council (FRC), and highlights where legal uncertainty remains, most notably in Verity Trustees Ltd v Wood.

What is the issue?

From 6 April 1997 a salary-related contracted‑out scheme's benefits had to satisfy a benchmark (the "reference scheme test"). The Court of Appeal confirmed that amendments made to salary‑related contracted‑out schemes between 6 April 1997 and 5 April 2016 are void where written actuarial confirmation that the scheme would continue to satisfy this reference scheme test was not obtained at the time.

As a result amendments during this period may be vulnerable to legal challenge where evidence of the required actuarial confirmation cannot be found. This applies equally to changes that improved benefits and those that made future benefits less valuable.

While the judgment created widespread uncertainty across the industry, it has also prompted a coordinated regulatory and professional response. This response is designed to support informed and reasonable judgement rather than retrospective perfection, and to avoid outcomes that would result in unexpected windfalls.

Regulatory expectations: Supporting good governance

TPR's trustee guidance does not prescribe a single course of action. Instead, it emphasises the importance of:

• Structured and well-reasoned trustee decision‑making
• Appropriate use of legal and actuarial advice
• Clear documentation of both process and outcomes

Trustees are expected to:

• Assess whether, and how, their scheme may be affected by Virgin Media
• Obtain appropriate legal advice
• Consider whether (and when) remediation is appropriate
• Formally instruct the actuary where remediation work is required, clearly defining the scope of work

Given the legal and technical complexities, TPR notes that trustees may find it helpful to receive training on this.

TPR explicitly supports a proportionate approach. Trustees are not expected to conduct exhaustive or speculative document searches; actuaries may work with the information available, requesting further evidence only where it is necessary.

Strong governance and audit trails remain important. Trustees should ensure that decisions, the supporting rationale and outcomes are clearly recorded and retained alongside scheme documentation.

How urgent is this?

TPR has confirmed that there is no prescribed timeframe for resolving potential Virgin Media issues.  However, many trustees may conclude that early action is appropriate, particularly because:

• While trustees may wish to take steps to ensure that any relevant documents are retained, in general the quality of the information and data available tends to degrade with time, making retrospective confirmation more difficult
• Trustees and sponsors may need to disclose remaining uncertainties in statutory accounts, with auditors continuing to scrutinise how Virgin Media risks are being addressed
• Schemes planning a buy-in — or already progressing towards buy-out and wind-up — may benefit from resolving uncertainties early so that the remaining liabilities are fully understood and appropriately funded

In practice, most trustees are likely to take initial steps in the near term, balancing this work against their other governance priorities.

FRC actuarial guidance is helpful – but is no magic wand

The actuarial guidance published by the FRC in January was broadly welcomed by the pensions industry and sets out a pragmatic framework for actuaries approaching these issues.

The guidance:

• Explicitly supports a proportionate, judgement‑based approach, reflecting the nature of the amendments made
• Recognises the practical challenges of reviewing historical scheme changes
• Allows reliance on indirect and secondary evidence where contemporaneous records are incomplete, provided conclusions are appropriately explained and documented

In many cases, the FRC guidance will help actuaries provide retrospective confirmation. However, there will still be circumstances where confirmation cannot be given without further information from trustees or sponsors. In such cases, trustees should expect clear explanations of the actuary's conclusions and any limitations.

Navigating uncertainty: Awaiting Verity Trustees Ltd v Wood

While the statutory remediation framework is helpful, some legal questions remain unresolved. It is hoped that the High Court decision in Verity Trustees Ltd v Wood will clarify further issues arising from the Virgin Media judgment (for example the extent to which confirmation was required when schemes closed to future accrual) and therefore which schemes will need to use the retrospective certification procedure provided by the Act.

Trustees should continue to monitor developments in this case and take advice as appropriate.

Conclusion

TPR's guidance and FRC's actuarial framework provides a clearer and more practical basis for trustees to address Virgin Media risks. Although legal uncertainty remains in certain areas, in most circumstances trustees should be able to conclude that their scheme documentation remains valid and they can continue operating on the basis of their existing understanding of member benefits. 

For many trustee boards, the focus over the coming months will be on agreeing and documenting their approach to addressing Virgin Media issues while remaining alert to further legal developments.