PLSA calls for urgent DWP action to remedy issues arising from Virgin/NTL case

In a case involving Virgin Media and NTL in June 2023, the High Court ruled that a lack of evidence of actuarial confirmation would render relevant amendments to affected contracted-out DB pension schemes’ rules invalid and void. The Court of Appeal upheld the ruling in July, with potential far-reaching implications for many DB schemes.

It could lead to pension schemes having to undertake a highly resource-intensive exercise to uncover records going back many years that provide historical evidence of actuarial confirmations.

Media attention on the case has prompted savers to contact their scheme to inquire as to whether they would be entitled to improved benefits, some pension schemes say.

According to a survey of PLSA members, 73% of DB scheme respondents say they are ‘moderately concerned,’ ‘very concerned’ or ‘extremely concerned’ by the ruling. A quarter said they had identified potential issues for their scheme, around a third of whom (35%) reporting the potential impact to be ‘very significant.’ Roughly half of respondents (53%) believe the ruling may have some impact on their ability to buy-out.

Eighty-four percent of those surveyed say they have sought legal advice on the matter and the overwhelming majority of schemes are seeking urgent clarity from the Government through legislation (81%) or guidance (8%).

Joe Dabrowski, Deputy Director of Policy at the PLSA said: “The decision in the Virgin/NTL case has caused a great deal of uncertainty which could lead to schemes and employers having to re-visit decisions and changes made many years ago. This is potentially an enormous and costly task with a host of unintended consequences for employers, pension schemes, the PPF and insurers.

“It is important that the DWP acts to provide clarity through legislative change or through guidance as soon as possible. The PLSA and others have proposed solutions to government, including regulatory amendments, which could provide a workable route forward.”

METHODOLOGY

The survey of PLSA members was conducted from 2-9 October 2024 with 73 responses.​

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, PR Manager
020 7601 1761 | [email protected]