DWP agrees to Virgin Media override
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The government will introduce legislation to provide a statutory override to the Court of Appeal ruling in Virgin Media v NTL Pension Trustees last summer, ending months of trepidation for scheme sponsors and trustees that could have seen higher liabilities.
The Virgin Media judgment stated that benefit changes made to contracted-out defined benefit schemes were only valid if there was written confirmation from an actuary. As some schemes failed to obtain or potentially lost this, there were widespread fears that benefits accrued were in fact higher than what sponsors and trustees intended.
An intense lobbying effort started for the DWP to use an existing power to retrospectively override the ruling, which it has now said it will use.
"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,” the DWP said.
For some time it was unclear if the judgment would affect public sector schemes. Some Local Government Pension Scheme funds took a view that the ruling applies to them. It is unclear if the potential impact on the public sector had an influence on the DWP’s decision.
