NTL buy-ins require tweaks after exclusion from Virgin Media remedy
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The NTL Pension Plan will include any uplifts given to members after the Virgin Media ruling in its latest buy-in and previous buy-ins once the benefits have been calculated and confirmed, as the s37 remedy excludes those involved in court proceedings before June 2025. Some say this raises questions about fairness.
In late 2024, the NTL pension scheme concluded a £181.5m buy-in with Pension Insurance Corporation. It was the scheme’s third and final buy-in with PIC, after two pensioner-only deals in 2011 and 2017.
NTL trustee chair Ross Russell said: “The trustees were able to transact after the Appeal Court judgment and notwithstanding the government announcement of potential legislation to overturn the judgment or otherwise permit remediation.”
The latest buy-in followed the Court of Appeal judgment in Virgin Media Ltd vs NTL Pension Trustee II Ltd. The case involving the NTL scheme determined that benefit changes made between April 1997 and April 2016 were not valid if the scheme could not show an actuarial confirmation, which is required by s37 of the Pension Schemes Act 1993.
After the ruling, the NTL trustees had to pay benefits to members as if the rule changes reducing benefits had never happened.
Given how many defined benefit schemes are likely to be affected by the ruling – including potentially public sector schemes – the government eventually listened to lobbying from the industry and agreed to legislate for retrospective validation of scheme rules, as part of the pension schemes bill 2026.
However, the legislation set to be introduced will exclude any parties to court proceedings underway before 5 June 2025 from the remedy, so “benefit adjustments and back-payments cannot and will not be reversed”, Russell said.
Once all benefits have been confirmed, they will be included retrospectively in the three buy-ins with PIC.
Had the legislation allowed the NTL trustees to remedy for s37 they would not have sought to recover uplifts that have already been paid, under an agreement with Virgin Media.
The exclusion of parties to court proceedings from the Virgin Media remedy was not a given, but an amendment to the bill to remove it was later withdrawn.
It was probably this “legislative back and forth” which meant that the NTL trustees could not tell their members for some time whether the uplifts would stay or go, said partner at law firm Norton Rose Fulbright, Lesley Browning.
Browning raised concerns about excluding the NTL and other trustees from the statutory Virgin Media fix in this way.
“Excluding schemes such as Virgin Media and Verity because they were already involved in legal proceedings on or before June 2025 sits uneasily with the stated aim of resolving an industry-wide defect, and continues to leave a small number of schemes in a uniquely difficult and, in our view unfair, position,” she said.
The February 2025 case of Verity Trustees v Wood also addressed s37 among others.
It is not unusual for trustees to proceed with a buy-in and wait to deal with any issues in the data cleanse, she said.
“We have seen this happen many times when the issues that need correcting by the statutory fix are not very material,” she said.
However, if the issue to be resolved is material – and could have a big impact on the insurance premium if it transpires it cannot be resolved – trustees would want to wait and see if they can use the statutory fix, she added.
“Given the bill will get Royal Assent shortly and the guidance has been issued, there is no reason not to start trying to resolve s37 issues now,” Browning advised.
The Pensions Regulator published guidance last month on potential remediation for the Virgin Media issue. Even though the remediation will not be available until the pension schemes bill receives Royal Assent, TPR said trustees can give written instruction to their actuary to start the work now.
“It may be beneficial for schemes that are starting a buyout process to proceed with the remediation work urgently, while others may adopt a timetable that is most efficient and cost effective for them,” it said.
Should schemes like NTL and Verity be included in the remedy?
