The trustee agenda: key developments from May 2023 onwards

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In our latest Entrust insight, we report on key pensions developments since the beginning of May.

Where relevant we include links to more in-depth information that has been produced by our colleagues in the Gateley Legal pensions team, and a note where we have identified that action is or may be required.

Key cases

Scheme amendments made to contracted-out DB scheme without section 37 actuarial confirmation void

In Virgin Media Limited v NTL Pension Trustees Limited [2023], Mrs Justice Bacon ruled that amendments made in March 1999 to the revaluation provisions of a contracted-out defined benefit (DB) scheme, if made without written actuarial confirmation under section 37 of the Pension Schemes Act 1993, were void and ineffective. The voidness extended to both past and future service pension benefits and applied to all alterations not just to those that were or might be adverse.

Section 37 and associated regulations at the time of the alterations provided that the rules of a salary-related contracted-out scheme relating to ‘any section 9(2B) rights’ could not be altered unless the scheme actuary confirmed in writing that, after the alterations, the scheme would continue to satisfy the statutory contracting-out ‘reference’ scheme test (that applied between 6 April 1997 and 5 April 2016 when contracting-out was abolished). Section 9(2B) rights are broadly rights (and accrued rights) to pensions relating to contracted-out service.

The section 37 regime was changed from 6 April 2013 to restrict the requirement to provide written actuarial confirmation to future service benefits, with different requirements in respect of past service being introduced.

The judgment has potentially wide-reaching consequences for schemes which have been amended without the required actuarial confirmation. There may be a further Court hearing which could consider further issues such as whether it would be possible for the scheme actuary to provide section 37 confirmation retrospectively. The case may also be appealed. Aside from this, the Government could legislate under an existing statutory power to introduce regulations retrospectively validating amendments that would otherwise be void because section 37 confirmation was not provided. 


Formerly contracted-out DB schemes should contact their legal advisers to confirm that section 37 confirmation has been obtained in respect of any scheme amendments that required it – if it has not, they will need to consider the follow-on ramifications. Schemes may wish to consider waiting until the outcome of any further hearing and/ or appeal but those in a transaction such as a buyout that will ‘set’ benefit levels will need to prioritise a review – in either case trustees should discuss the scheme’s position with their legal adviser and determine the most appropriate way forward.


The Retained EU Law (Revocation and Reform) Act 2023

The Retained EU Law (Revocation and Reform) Act 2023 received Royal Assent on 29 June 2023. The Act gives the Government extensive powers to amend how EU law is dealt with now that the UK is no longer part of the European Union. You can read more about the Act in our Insights (1), (2) and (3)

(EU retained law relating to financial services is not included within this Act – the revocation and replacement of such law is being dealt with under the Financial Services and Markets Act 2023.)


At present, the list of planned EU law revocations does not include EU-related pensions law, but this may well change so keep an eye out for any developments in this area.

Economic Activity of Public Bodies (Overseas Matters) Bill

The Economic Activity of Public Bodies (Overseas Matters) Bill was introduced into Parliament in June. This will prevent public authorities when making investment or procurement decisions from taking into account foreign state conduct in a manner that demonstrates political or moral disapproval of a state (unless to do so would be ‘positively consistent’ with the UK Government’s foreign policy). The Local Government Pension Scheme will be covered by this legislation. See Gateley’s Insight for more details.

Consultations, enquiries and statutory reviews

Department for Work & Pensions (DWP) review of transfer regulations

The DWP’s review of the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 review concludes that the regulations seem to be working as intended to protect against transfers to scam arrangements whilst permitting most transfers to proceed without unfounded interruption. Nevertheless, the review notes concerns with how the regulations apply to overseas investments and incentives (see Gateley’s Insight) and confirms that the DWP will work further with the industry and the Pensions Regulator (TPR) to determine if changes are required to deal with these issues.

WPC DB with LDI report

The Work and Pensions Committee (the WPC) 23 June 2023 report on DB pensions with liability-driven investment (LDI) contains a number of key recommendations, primarily for the DWP and TPR:

  • the DWP, TPR and the Pension Protection Fund (the PPF) should produce an “account of the impact on pension schemes of the LDI episode” by the end of 2023;
  • TPR to collect LDI data and engage with relevant schemes afterwards where appropriate;
  • the DWP needs to respond to its 2018 consolidation consultation by the end of October 2023 (given consolidation should improve governance);
  • the DWP and TPR should consider how to improve scheme governance and whether LDI use should be restricted;
  • the inclusion of investment consultants within the FCA’s regulatory perimeter should be completed before the current Parliament ends;
  • the DWP and TPR should report to the WPC on how they will monitor LDI resilience and maintenance (by the end of October 2023) and consult on whether LDI disclosure requirements should be required in a scheme’s annual report or investment statement;
  • the revised DB scheme funding regime should not be introduced until at least a full impact assessment has been undertaken;
  • the DWP should tell the WPC by the end of January 2024 how it plans to take forward the Financial Policy Committee’s recommendation to extend TPR’s statutory remit to include financial stability considerations.


Schemes should already have taken appropriate action following TPR’s LDI statements and April 2023 guidance (see our insight). They should also be aware that they will need to provide LDI data to TPR and that the use of LDI will be monitored more closely going forward.


Environmental, Social & Governance (ESG) campaign

This Autumn, the Regulator will be carrying out a regulatory initiative to check that, where required, trustees have published their statement of investment principles and implementation statement, and, it will then review sample documents to check the quality of the ESG and stewardship provisions.


If unsure, trustees should check that they have produced and published a statement of investment principles and implementation statement where required, and that they include relevant ESG and stewardship disclosures – TPR may take enforcement action where reasonable efforts have not been made on policies. They should also look out for the results of TPR’s review as they will include examples of good practice which schemes will find useful.

Revised DB scheme funding code of practice

The Regulator has confirmed that the implementation of its revised DB scheme funding code has been moved back from October 2023 to April 2024.


Until the new funding and investment regime is in force, trustees should consider their scheme’s long-term funding plans and whether the scheme might adopt the Fast Track parameters or bespoke approach (see Gateley’s In-depth Insight).

Annual funding statement 2023 (the AFS)

Although most schemes will have seen improved funding levels, some will not and due to continued economic and financial uncertainty, schemes should not be ‘complacent’. The AFS provides guidance on the different considerations that apply both generally and by reference to three scheme types. TPR wants schemes which have seen funding improvements to lock in gains where possible and expects those with decreased funding to check whether funding plans remain on course.


The key action for schemes in scope is to assess where they are on the long-term journey plan (or set one if they do not already have one). Gateley’s In-depth Insight provides more detail. 

Refreshed guidance on distressed employers

TPR has ‘refreshed’ its protecting schemes from sponsoring employer distress guidance. The changes are not significant and you can read about the key points from the guidance in Gateley’s Insight.


When a DB scheme sponsoring employer is in distress, schemes should refer to the guidance, take advice where need be, and make sure that they take relevant steps to protect the scheme. Early engagement with key stakeholders and, where appropriate, TPR, can be key in mitigating risk.

Equality, diversity and inclusion (EDI) survey

TPR has launched its first trustee diversity and inclusion survey. Invites have been issued to 97,000 trustees of defined contribution and DB occupational pension schemes and to public service pension scheme board members.


Trustees should complete the survey by 4 August 2023. TPR expects to publish the results by the end of 2023. You can read about TPR’s March 2023 EDI guidance here.

Defined contribution (DC) scheme survey – too many small schemes failing on value

The Regulator’s annual DC schemes survey shows just 24% of the DC schemes surveyed were carrying out the annual value for members assessment and 64% of the 208 specified schemes were unaware that they needed to do a more detailed assessment. Furthermore, whilst most large schemes and master trusts surveyed were assessing climate change financial risks and opportunities, far fewer medium (48%) and smaller/ micro schemes (12%) were. 


DC schemes should satisfy themselves that they are meeting their obligations in respect of value for members and climate change.


Expanded Pension Protection Fund (PPF) role – consolidation

The Government is considering whether to extend the PPF to cover smaller stressed DB pension schemes. The PPF has welcomed the opportunity to collaborate on consolidation – legislative change would be needed to extend the PPF in this way.

A 29 May 2023 report from the Tony Blair Institute for Global Change also recommended an expanded PPF role through it becoming the UK’s first ‘superfund: GB Savings One’ (with the potential for this to cover not just smaller DB schemes but also, eventually, other DB, DC and public sector schemes). 

If taken forward, consolidation would significantly change the pensions landscape. Gateley’s Insights (1) and (2) have more information.

Sustainability strategy

The PPF’s first sustainability strategy sets out its plans for “catalysing the growth of a sustainable pensions industry”. You can read about the goals and targets in Gateley’s Insight covering 3 to 10/ 17 July.

Pensions dashboards

New single 31 October 2026 connection deadline

The Pensions Dashboards (Amendment) Regulations 2023 will bring in a new single backstop 31 October 2026 connection deadline. This will replace the current staging profile, staging deadlines and connection window. The reference date to assess whether a scheme is in scope of the requirements (occupational pension schemes with 100 or more non-pensioner members) will now be the scheme year end between 1 April 2023 and 31 March 2024. 

Schemes will still have staged connection dates by size and type, but the staging dates will be contained in guidance rather than in legislation. The Pensions Dashboards Programme has noted that the guidance will not be mandatory but that trustees will “be expected to demonstrate how they have had regard to the guidance” – see here for its FAQs on the new connection approach.

The overview and when your scheme needs to connect with dashboards sections of TPR’s initial dashboards guidance were updated on 8 June 2023 to cover the new developments. 

PASA has also published Dashboards Values Guidance on ‘good practice’ approaches to dealing “with a number of common issues not addressed by legislation or Standards” (covering matters such as late retirement, additional voluntary contributions, revaluation and underpins). 

Gateley’s Insight has more information on the new connection date and PASA’s guidance.


Trustees should carry on preparing for dashboards as there is still a lot to be done to be ‘dashboards ready’ – the scheme administrator will be key in this preparation. TPR’s 14 June blog notes how important adequate data is for ensuring a scheme’s readiness (see Gateley’s Insight). 

Pensions Dashboards (Prohibition of Indemnification) Act 2023

The Pensions Dashboards (Prohibition of Indemnification) Act 2023 received Royal Assent on 2 May 2023. It amends the Pensions Act 2004 to prohibit scheme assets from being used to reimburse trustees for civil penalties imposed for breaches of the pensions dashboards legislation (the 2004 Act already prohibits assets being used in this way for other civil fines and penalties).

Other developments

Pensions Ombudsman cyber incident

The Pensions Ombudsman has been investigating a cyber incident – it disabled application forms and LiveChat as a ‘precautionary measure’. It is working with relevant agencies and will provide a further update in due course.


Trustees should be aware of the measures being taken should members have a query.

Got a question? Get in touch.