On 1 September 2025, the Government published draft legislation intended to allow schemes to validate historic amendments which would otherwise be void because of a missing “section 37 certificate”.  

The Virgin Media case found that amendments to contracted-out schemes made between 6 April 1997 and 5 April 2016 were void if the trustees didn’t obtain a section 37 certificate  from the scheme actuary confirming that the scheme would continue to meet the statutory standard after the amendment was made. It’s often unclear from scheme documents whether a section 37 certificate was obtained. This raises questions about whether historic rule changes can be treated as valid.

The draft legislation allows for a missing section 37 certificate to be remedied by the  scheme actuary confirming that “in the actuary’s opinion it is reasonable to conclude that … the alteration would not have prevented the scheme from continuing to satisfy the statutory standard”.

For these purposes, a scheme actuary may:

• make assumptions or rely on presumptions appropriate in the circumstances; and
• act on the basis of the information available to the actuary (as long as the actuary considers it sufficient  in the context).

This flexibility should allow actuaries to give the necessary confirmations in many circumstances where they may not otherwise have been able to due to lack of data or other contemporaneous information.  However, there may be some cases where the actuary feels unable to reach a conclusion on the available information so this will not necessarily allow all historic amendments to be validated, for example where missing salary data is central to the opinion. 

Steps can be taken at any time from now to remedy for missing section 37 certificates.  It is not necessary to wait for the provisions to come into force.

There are some circumstances where the remedy will not be available, including:

• where the trustees have taken steps to alter payments having concluded that a historic amendment was void due to a missing section 37 certificate; and
• where court proceedings have been commenced before 5 June 2025 asking the court to rule on the point.

Amendments made to schemes which have been wound up, or transferred to the PPF or FAS will be treated as having been validated.  No further action will be required in respect of such schemes.  

Our thoughts

It is helpful that the Government has taken steps to introduce a remedy.  This should allow a significant number of potentially void amendments to be validated.

The judgment in Verity Trustees Limited v Wood (which we hope will be handed down later this year) may provide clarity as to what amendments needed section 37 certificates.  For example, it may find that only amendments to benefits which are key to compliance with the statutory standard such as accrual rate and pensionable salary are caught, or it may find that any amendment during the relevant period which affected benefits is caught.  The case is also expected to consider the position for scheme closures.   

Trustees will need to identify deeds which are at risk of being void for lack of a section 37  certificate and ask the current scheme actuary for the necessary confirmation.  

Until the Pension Schemes Bill is passed (expected to happen in early 2026) the provisions could be subject to amendment.  The provisions are due to come into force two months after the Bill is passed.