Pensions update: major Virgin Media development

Government statement

In a statement today the Government announced:

"The Government is aware that following last year’s Court of Appeal judgment in Virgin Media Limited v NTL Pension Trustees Limited, there is increased uncertainty in the pensions industry. We recognise that schemes and sponsoring employers need clarity around scheme liabilities and member benefit levels in order to plan for the future.

The Government will therefore introduce legislation to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards.

Scheme obligations will otherwise be unaffected and the Government will continue to maintain its robust framework for the funding of defined benefit pension schemes in order to protect people’s hard-earned pensions."

This means that relevant contracted-out schemes that failed to get actuarial confirmation of changes at the time in accordance with legislation, and were fearing that such changes would therefore be invalid, can obtain the necessary confirmation now to validate the changes.

Stephenson Harwood comment

Today's announcement will be very welcome news in the pensions industry. Whilst we wait to see the details of the Government's fix, trustees and companies with Virgin Media worries will no doubt breathe a sigh of relief at this development.

This is particularly welcome for schemes in the buy-in phase who were facing uncertainty as to whether they had secured the correct benefits for members as well as trustees and companies that were fearing a large increase in liabilities as a result of failing to obtain actuarial confirmation at the time.