Virgin Media remediation: what trustees (and sponsors) should be doing now

The 2026 Act introduces a statutory route to address the Section 37 issue by treating “potentially remediable alterations” as meeting the relevant statutory requirements, provided trustees obtain an opinion from their current scheme actuary confirming that it is reasonable to conclude that, on the assumption it was validly made, the alteration would not have prevented the scheme from continuing to satisfy the statutory contracting-out standard.

The policy intent is to allow schemes to regularise historic amendments provided the alteration was otherwise validly made and would not have caused the scheme to fail the statutory contracting-out standard. Thereby avoiding the risk of benefits having to be revisited because an amendment is void due to a lack of (or lack of evidence of) a written actuarial confirmation.

However, not all alterations will qualify. Among other conditions, the alteration must have been treated as valid at the time, and no “positive action” must have been taken on the basis that it is void.

“Positive action” includes notifying members in writing that trustees consider an amendment to be void (due to non-compliance with Section 37) and that the scheme will be administered on that basis. 
 

The statutory mechanism is not available where the validity of an alteration (so far as it relates to contracting-out requirements) has already been determined in “qualifying legal proceedings”, or was in issue in such proceedings on or before 5 June 2025 (including where proceedings have since settled) (the Litigation Carve-Out).

“Qualifying legal proceedings” broadly means UK court proceedings determining a dispute as to scheme rules involving the trustees or managers and one or more members or beneficiaries (or their representative).

In practice, where issues have already crystallised into litigation, trustees should assume the statutory route may not be available and should take advice on strategy and next steps accordingly.
 

Schemes (or parts of a scheme) that have already fully wound up or transferred to the Pension Protected Fund or the Financial Assistance Scheme before the 2026 Act came into force are treated as having made valid alterations for the purpose of Section 37. No action therefore needs to be taken in respect of such schemes. 
 

Before commissioning a wide-ranging remediation exercise, trustees should first establish whether their scheme is likely to be affected.

As an initial triage, the key questions are:

• Was the scheme contracted-out on a salary-related basis during the relevant period?
• Were amendments made between 6 April 1997 and 5 April 2016 that might have affected section 9(2B) rights (including indirectly, which remains an area of some uncertainty)?
• Is there a credible concern that the required Section 37 confirmation cannot now be located or evidenced for any Relevant Amendments? 

If the answer to any of the above three questions is “no”, trustees will not need a remediation project.

Trustees should also consider whether a prior document review has already established, on a clear and evidenced basis, that Section 37 compliance was achieved. Where that is the case, the appropriate next step is likely to be to document that conclusion (to the extent it has not been formally documented already) and take no further action.
 

In practice, trustees will usually find that their scheme falls into one of three broad scenarios, which will shape the appropriate approach:

• Schemes that are or have been subject to litigation – advice will be needed on whether the Litigation Carve-Out applies to some or all of the Relevant Amendments. If it does, the statutory remediation route will not be available for those Relevant Amendments and so the focus will likely be on litigation strategy and the potential associated implications for administration and funding.
• Transaction-driven cases – where there is a planned buy-in/buy-out, corporate transaction or a significant funding milestone, there is likely to be greater urgency to commence a remediation exercise. In these cases, addressing Virgin Media risk may be driven by sponsor requirements, transaction diligence or audit considerations.
• All other schemes – where no immediate trigger exists, trustees can decide when would be the best time to commence a remediation exercise (taking into account other scheme projects). There is no long-stop date by which the “legislative fix” must be used and so trustees have time. That said, trustees should be mindful of the risk that records may degrade. They should also consider the benefit of having certainty over the validity of any “in question” rule amendments sooner rather than later. 

The Pensions Regulator has issued guidance on “Potential remediation for past alterations to salary-related contracted-out pension schemes” which is designed to help trustees determine what action they should take in relation to the Virgin Media case and the “legislative fix”.
 

Although trustees will typically lead the remediation process, sponsor priorities may feed into the approach, particularly where funding, accounting or transaction outcomes are affected.

A practical approach is to agree early on a shared articulation of the objective – for example, reducing uncertainty for a transaction, or confirming benefit specifications for administration – and to align on a focused and proportionate workplan.

Trustees should ensure that the process is properly documented, and any conflicts are identified and managed appropriately.
 

In many schemes, only a subset of amendments will be relevant to Section 37, and only some of those will be material.

A practical starting point is to identify amendments made between 6 April 1997 and 5 April 2016 and then assess (with legal advice) whether they engaged the Section 37 requirements and fall within the scope of the statutory mechanism. This is likely to require legal advice.

Where actuarial confirmation is sought, trustees should give clear instructions to the actuary specifying which amendments are to be considered and whether they should be assessed individually or in combination.
 

Trustees should assemble a coherent evidence bundle for the scheme actuary. This may include:

• executed deeds and amending documentation;
• board minutes and resolutions from the relevant time;
• contemporaneous legal or actuarial advice;
• member communications;
• contracting-out and reference scheme documentation; and
• other evidence of how the Relevant Amendment was implemented. 

The key is to take a proportionate approach by gathering what is readily available and informative, identifying gaps, and making a conscious decision as to whether further searches are justified.
 

Whatever approach is adopted (whether taking no action, proceeding with statutory remediation, or addressing issues through litigation) trustees should clearly document their reasoning, including the assumptions made and why the approach is proportionate. A clear audit trail is important.

Trustees do not need to communicate with members regarding the remediation process. The Regulator’s guidance suggests trustees may want to prepare a reactive response to manage member queries. Whether this is necessary is likely to depend on what, if anything, trustees have already communicated about the Virgin Media case.