The recent decision from the Court of Appeal upheld that amendments to a contracted-out pension scheme's rules that affect contracted-out rights (technically known as Section 9(2B) rights) are void if made without the required actuarial confirmation as mandated by Section 37 of the Pension Schemes Act 1993 and Regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations 1996.
This ruling impacts historical amendments made between 1997 and 2016, potentially increasing scheme liabilities if such amendments are found to be void due to missing actuarial confirmation.
Trustees and Employers may wish to review past amendments from 1997 to 2016 to ensure they comply with the requirement for actuarial confirmation. This involves checking if the necessary confirmation was obtained and documented at the time of the amendment. If there is doubt about whether the confirmation was obtained, Trustees may need to search through historical records, including emails and other correspondence, for evidence.
Trustees and employers should stay informed about any developments and be prepared to adjust their actions based on the final legal outcome. Note that it is possible that the DWP will intervene to bring in legislation to permit retrospective actuarial confirmations.