London, Jan 24, 2026, 00:48 GMT
Britain’s Financial Reporting Council (FRC) has issued new guidance for pension scheme actuaries handling historic rule changes following the Virgin Media case. This comes as the government moves to introduce legislation allowing schemes to validate older amendments. (Pensions Age)
The ruling is significant because it revealed that some “contracted-out” defined benefit schemes—workplace plans that replaced part of the state pension and promise benefits based on pay and service—could be declared void if they lack the required written actuarial sign-off from that period. According to the FRC’s technical guidance, this missing evidence might expose schemes to higher liabilities than anticipated. (Actuarialpost)
The FRC said it released the guidance ahead of the expected Royal Assent for the Pensions Schemes Bill — the final hurdle before a bill becomes law — and noted it might update the guidance as the draft progresses through parliament. Pensions Regulator policy director Joey Patel described it as “valuable” and said the regulator plans to issue trustee guidance in spring. (FRC (Financial Reporting Council))
The crux of the dispute centers on section 37 of the Pension Schemes Act 1993. This section mandated that certain rule changes be supported by written confirmation from the scheme actuary, verifying that minimum benefit standards still passed the “reference scheme test.” Norton Rose Fulbright clarified that this confirmation didn’t have to come as a formal certificate, but it had to be documented in writing and available at the relevant time. (Norton Rose Fulbright)
Proposed rules dubbed the “Virgin Media fix” would let trustees request the current scheme actuary to verify that an old amendment likely met the statutory standard, assuming it was properly implemented. Slaughter and May noted the approach permits actuaries to use new information and fill in gaps with professional judgment. (Slaughter and May)
Pensions Expert says the FRC’s guide aims to help actuaries navigate the “section 37 fix,” advocating a balanced review of past scheme changes instead of an endless search for flawless records. (Pensions Expert)
Mark Babington, executive director of regulatory standards at the FRC, described the Virgin Media case as sparking “considerable concern” throughout the industry. Stewart Hastie, chair of the Association of Consulting Actuaries, promised his group would “closely scrutinise” the guidance to confirm it covers everything. (Corporatefinancenews)
The Institute and Faculty of Actuaries said the guidance was created with input from the industry, including its members and the Association of Consulting Actuaries. It aims to back retrospective confirmations and boost confidence that past changes met legal standards. (Institute and Faculty of Actuaries)
However, the fix won’t apply to all schemes or disputes. DLA Piper points out that the government’s draft proposals come with exclusions, so certain changes won’t be retrospectively validated even if they fall under the broader uncertainty. (Dlapiper)
Professional Pensions said consulting actuaries have welcomed the change as schemes await the bill’s passage, though the process will still rely on judgment where old records are patchy and facts disputed. (Professionalpensions)
