The FRC’s actuarial guidance, setting out how actuaries should approach providing retrospective confirmation of a potentially remediable alteration under the Virgin Media legislative remedy, was published on 23 January 2026. Here we explore the guidance in detail.
On 23 January 2026, the Financial Reporting Council (FRC) published actuarial guidance on the Pension Schemes Bill’s Virgin Media legislative remedy. The guidance sets out a ‘practical framework to support’ the role that actuaries will play in deciding whether a ‘potentially remediable’ alteration, which might otherwise be void because of a failure to comply with section 37 of the Pension Schemes Act 1993, can be retrospectively confirmed as valid.
The guidance has been produced ahead of the Bill receiving Royal Assent and will be amended as necessary to reflect the final version of the legislation.
As well as providing pragmatic support for actuaries, the guidance also gives trustees insight into how actuaries will approach the retrospective confirmation process and what types of information will be needed.
Recap
To recap, the Court of Appeal in the July 2024 Virgin Media Ltd v NTL Pension Trustees II Ltd case decided that rule alterations of post 6 April 1997 contracted-out benefits (known as section 9(2B) rights) between 6 April 1997 and 5 April 2016 made without written actuarial confirmation that the scheme would continue to meet the ‘reference scheme test’ (the RST) are void.
Because of the decision’s potentially wide-ranging and material impact on the defined benefit (DB) pensions sector, the Government decided to introduce a legislative fix under which ‘potentially remediable alterations’ can be validated by the current scheme actuary (see our insight).
As it currently stands, the Bill provides that, to be treated as valid, the actuary must be able to confirm in writing that, in their opinion, it is reasonable to conclude that the alteration would not have prevented the scheme from meeting the RST. When deciding whether to provide this confirmation, the actuary may:
- act on the information available, provided they consider it is sufficient to form an opinion on the matter; and
- take any professional approach that is open to them in the circumstances (including making assumptions and relying on presumptions).
Clarification of key terms section
The guidance tells actuaries how to interpret two key phrases from the retrospective confirmation process: ‘reasonable to conclude’ (use ordinary meaning and exercise judgment) and ‘continuing to satisfy’ (assume that the RST was met immediately before the rule alteration).
Proportionate approach
Actuaries should take a proportionate approach – the remainder of the guidance sets out what this means.
The actuary does not have to:
- put themselves in the position of the actuary at the time of the amendment;
- have all the data that would have been available at that time;
- satisfy the requirements of previous actuarial guidance notes or superseding contracting-out regulations; or
- determine with certainty that the RST was met after purported rule alteration or that the alteration would not have prevented the scheme from continuing to meet RST.
The guidance here is particularly useful as it means that actuaries can provide confirmation even in cases where the information available is restricted (provided of course that it is sufficient for them to form the requisite opinion).
Data availability
The actuary should use data that is readily available, meaning that which can be obtained without “incurring a disproportionate amount of time and effort”. The actuary is permitted to make appropriate assumptions and, in most cases, will not need full member data.
Cases where no further information is required (illustrative examples provided)
Such cases may include alterations such as those:
- that do not decrease benefits;
- that impact benefits not relevant for the RST such as lump sum benefits on death in service, children’s pensions and ill-health pensions;
- where benefits are subject to an RST underpin;
- indexation/ revaluation caps or RPI to CPI indexation/ revaluation changes which correspond to legislative changes;
- where simple analysis is enough.
Cases where further information is required (illustrative examples provided)
The guidance notes that it is unlikely there will be individual member data. In most cases, this will not be required and indirect evidence will be sufficient, for example: legal advice or trustee meeting minutes, RST and contracting-out certificates and valuations after the alteration, and documents showing that RST consideration work was undertaken at the time of the alteration.
Contradiction approach (illustrative examples provided)
It is possible to adopt a ‘contradiction approach’ – this will involve determining what pay structure would have been required at the time of the alteration to meet the RST with the actuary (or the trustees/ employer) confirming that such circumstances either did not or were unlikely to have existed.
Inability to provide retrospective confirmation (illustrative examples provided)
If the actuary is not able to provide retrospective confirmation, they should tell the trustees. They can provide details and may also explain what additional information might, if it were available, allow them to provide confirmation.
Trustees asking for retrospective confirmation that is unnecessary/ out of scope (illustrative example provided)
A trustee might ask for retrospective confirmation that the actuary considers is not needed, for example, where there is evidence of confirmation having been given at the time or the alteration is not in scope of the remedy. In these cases, the actuary might explain their view and suggest the trustee seek legal advice or, in cases where they can form an opinion, confirm that they can provide retrospective confirmation.
Multiple rule alterations
The actuary can consider the combined effect of multiple rule alterations with the same effective date. Although they will consider those with different effective dates sequentially, the actuary can still ask for the information together given it may come from the same parties and have relevance to more than one alteration.
Illustrative examples and flow chart
As well as setting out several illustrative examples, the guidance provides a flow chart of a possible proportionate approach that may be adopted whilst noting that other approaches may also be taken.