Scheme actuary meaning

3i Plc v Decesare (as representative member of the 3i Group Pension Plan) and other companies [2025] EWHC 3023 (Ch) What are the practical implications of this case? It is commonly understood that a ruling fixing the meaning of terms in one instrument does not bind a later court faced with different wording, yet earlier decisions can still carry weight as illustrations of how particular expressions might be interpreted elsewhere, in light of the reasoning for preferring one construction over another. In British Broadcasting Corporation v BBC Pension Trust [2024] EWCA Civ 767 (the BBC case), the Court of Appeal examined an amendment power which barred changes from operating in relation to active members whose interests were said by the scheme actuary to be affected, save where specified exceptions applied. No amendment was to take effect for active members unless one of several circumstances existed. One issue was whether ‘interests’ embraced the ability of members to accrue any future service benefits. The Court, viewing the term in its context,...

Judgment and case digest: Virgin Media Ltd v NTL Pension Trustees II Ltd [2024] EWCA Civ 843, [2024] All ER (D) 118 (Jul) Background: Ensuring that contracted out schemes remain sufficiently generous From 6 April 1997 to 5 April 2016, certain salary-related schemes could contract out, meaning members did not accrue some State Pension rights and both they and their employers paid reduced national insurance contributions. In return, those schemes had to offer benefits at least matching a prescribed ‘reference scheme’, serving as broad compensation for the State Pension foregone. Where a scheme first contracted out on or after 6 April 1997, the scheme actuary demonstrated adequacy by certifying that the reference scheme test was satisfied. After that point, and broadly every three years, the actuary had to revisit this forward-looking assessment—commonly when performing the scheme’s triennial valuation—confirming in the valuation report that the test continued to be met. If, at any stage, the test was not satisfied, the scheme would be required to cease contracting out...

On 10 September 2024, the Pension Protection Fund stated that, at the end of August 2024, the combined surplus for the country’s 5,000 defined benefit retirement savings plans was £475bn, compared with a surplus of £475.5bn recorded at the end of July 2024. Such a surplus shows that assets within the savings plans are worth more than liabilities they must meet. According to Shalin Bhagwan, the fund’s chief actuary, outlook remains ‘relatively stable’, notwithstanding the slight dip...

What is an assessment period? When a qualifying insolvency event affects the sponsoring employer of an eligible scheme, the scheme moves into a Pension Protection Fund (PPF) assessment period as a result of that event. This arises on the occurrence of that event. The day on which that period starts is known as the ‘assessment date’ for the scheme. Since 3 January 2012, the assessment period is no longer required to last for at least 12 months. Throughout the assessment period, the PPF considers whether the scheme satisfies the requirements for entry into the PPF. In particular, the PPF will appoint an actuary to carry out a valuation of the scheme as at the assessment date, in order to determine whether the scheme’s assets are less than the protected liabilities—broadly, the benefits the PPF would pay to members if the scheme were to enter the PPF...

THIS PRACTICE NOTE APPLIES TO REGISTERED OCCUPATIONAL PENSION SCHEMES Given the intricacies of contemporary pensions law and scheme administration, it is little surprise that trustees of occupational pension schemes typically engage professional advisers to help them discharge their responsibilities. In addition, trustees of most registered arrangements are under a legal duty to appoint specified professional advisers, though certain schemes are excluded from these duties, depending on the character of the relevant pension scheme. For more information, see Appointing pension professional advisers and other service providers. Types of professional advisers Professionals commonly engaged in connection with (defined benefit) occupational pension schemes include: scheme auditor scheme actuary fund manager custodian of assets legal adviser Strictly, there is no statutory obligation on trustees of registered pension schemes to appoint legal advisers; however, where any individual is appointed as a legal adviser by someone other than the trustees and the trustees rely on that person’s skill or judgement, the trustees may...

The need for rectification Errors frequently creep in when preparing pension scheme papers, altering them, or noting the use of trustees’ powers. DIY fixes are typically unavailable, as these errors cannot, in general, be cured after the event via the scheme’s amendment power where that would prejudice accrued entitlements to the amendment date or alter tax treatment. That is so because ss 67–67I of the Pensions Act 1995 (PA 1995) broadly bar harmful changes to members’ subsisting rights unless the member agrees or an actuary certifies those rights have been preserved. Moreover, a mistaken alteration of a pension scheme’s governing provisions may inadvertently impair members’ subsisting rights, with the result that, without an appropriate remedy, the change would be void or voidable (depending on the nature of the alteration and, given the changes to s 67 over time, when it occurred) for contravening s 67 and/or under a limiting proviso in the scheme’s amendment power, as demonstrated in Mitchells & Butlers Pensions v Mitchells & Butlers...

Effective from [ insert date ], this statement of investment principles applies. 1 Statement of investment principles 1.1 Purpose of statement This document outlines the principles that steer decisions on investing the assets of the [ insert name ] Pension Scheme (the Scheme). It is published by the Trustees of the [ insert name ] Pension Scheme (the Trustees) to meet the requirements of the Pensions Act 1995, s 35. 1.2 Review The statement will be assessed each year. The Trustees may conduct an ad hoc review at any time if they consider there has been a material change in investment policy, or any other circumstances affecting the Scheme. 1.3 Advice The Trustees have received and evaluated written advice on the contents of this statement in a letter from [ insert name of investment consultant or actuary ]. [ insert name ] have confirmed to the Trustees that, through their ability and practical experience in financial matters, and with appropriate knowledge...

THE [ insert name of pension scheme ] PENSION SCHEME This statement of investment principles takes effect from [ insert date ]. 1 Statement of investment principles 1.1 Purpose of statement This document outlines the principles that guide decisions on investing the assets of the [ insert name ] Pension Scheme (the Scheme). The Trustees of the [ insert name ] Pension Scheme (the Trustees) issue this document to meet the requirements of section 35 of the Pensions Act 1995. 1.2 Review The statement will be reviewed each year. The Trustees may conduct a special review at any time if they consider there has been a material change in investment policy or any other circumstances affecting the Scheme. 1.3 Advice The Trustees have received and considered written advice on the contents of this statement in a letter from [ insert name of investment consultant or actuary ]. [ insert name ] have confirmed to the Trustees that, through practical expertise in financial...