Jurisdiction(s):
United Kingdom

Court of Appeal: actuarial confirmation required for alterations to section 9(2B) contracted-out rights, including future service; unconfirmed amendments void (Virgin Media v NTL Pension Trustees II)

Published on: 19 August 2024

Published by a LexisNexis Pensions expert

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Article summary

Virgin Media Ltd v NTL Pension Trustees II Ltd and others [2024] EWCA Civ 843, [2024] All ER (D) 118 (Jul)

What are the practical implications of this case?

The Court of Appeal’s ruling is unlikely to receive broad approval. The proposition that ‘accrued rights’ encompass benefits to be earned through future service—a central plank of the court’s reading of ‘section 9(2B) rights’ in the Contracting-out Regulations, SI 1996/1172, reg 42(2)—may appear unexpected; Lord Justice Nugee accepted there was a measure of paradox.

In practice, trustees of occupational schemes that were previously contracted out on a salary-related basis will probably need to reassess any rule changes made between 6 April 1997 and 5 April 2016 (even where limited to future service rights) to confirm that actuarial sign-off was obtained and that section 37 was satisfied. Where such confirmation cannot be shown, those amendments (in light of the Court of Appeal’s ruling and Bacon J’s first instance judgment) will be void. The resulting expense for schemes could be considerable.

Nonetheless, important uncertainties persist. For example, what counts as adequate evidence of actuarial confirmation? What form...

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