Virgin Media Case – Government acts to resolve uncertainty: The Government has announced it will introduce regulations to allow retrospective validation of historic benefit rule changes in contracted‑out DB schemes where no written actuary confirmation was obtained under section 37 of the Pension Schemes Act 1993. This follows the Virgin Media case, which cast doubt on the validity of such amendments. While this is welcome news—particularly for schemes approaching buy-out—full details of the proposed legislation are not yet known. Trustees will still need to work with legal and actuarial advisers to assess the impact and confirm whether retrospective validation is appropriate.
New Pension Schemes Bill – What to expect: The government has announced a substantial new Pensions Bill which includes several important measures for those working with DB pension schemes, alongside significant developments for the DC sector. A headline reform is the introduction of a statutory override allowing DB schemes to distribute surplus on a “low dependency” funding basis. This could pave the way for more schemes to return surplus funds to sponsors, without winding up, although further detail will be needed on how this interacts with existing scheme rules and member protections.
The Bill also provides for a legal framework to support DB consolidators (such as superfunds), potentially giving new impetus to this developing market. It includes new powers for the Pensions Regulator to authorise and supervise such arrangements, which could become a realistic option for some schemes unable to reach buyout.
Further DB-related provisions include changes to the Pension Protection Fund (PPF), giving it greater flexibility over its levy and amending the definition of terminal illness for claimants. If the PPF believes this legislation provides sufficient assurance, schemes could see a zero risk-based levy announced this year. The Bill also proposes reinstating the Pensions Ombudsman as a ‘competent court’—an apparently technical change that may help resolve some disputes more efficiently.
For DC schemes, the Bill sets out a new value-for-money framework, introduces a default retirement option (with opt-out), and mandates the consolidation of small, deferred pots under £1,000. Multi-employer schemes will be expected to operate default funds of at least £25bn by 2030, with the government gaining reserve powers to steer investment into private markets.
Guidance on market volatility: The Pensions Regulator has published a new report offering guidance to trustees on managing risk in the face of ongoing market volatility. The report draws on TPR’s supervisory insights and outlines key areas for trustee focus, including liquidity, cashflow management, investment strategy, covenant, and member communications. TPR reminds Trustees of the importance of robust governance, operational resilience, and staying alert to pension scams—particularly in times of economic uncertainty. The full report, Helping Trustees Navigate Market Volatility, is available here: Market oversight: Market volatility and what trustees should do | The Pensions Regulator
The Society of Pensions Professionals (SPP) has published a report assessing the impact of recent US tariffs on UK pension schemes. For Defined Benefit (DB) schemes, the report notes that while most are well-funded with strong risk management, there is potential concern over employer covenants due to economic pressures such as reduced demand and supply chain disruptions. The report can be found here: SPP report on US tariffs
