Mark Tinsley, Principal at Barnett Waddingham comments: “We welcome The Pensions Regulator’s (TPR’s) practical guidance on retrospective section 37 confirmations which brings us even closer to a regulatory solution to this long-standing headache for formerly contracted-out schemes. The final piece of the jigsaw – Royal Assent of the Pension Schemes Bill – is now a matter of weeks (if not days) away and the message is clear and simple: There is no need to wait for the Bill to be enacted to start moving forward. TPR’s guidance, along with the guidance already issued by the FRC, can now be used to progress matters where schemes have been in a state of limbo since the High Court and Court of Appeal judgements in the Virgin Media case. The Regulator is absolutely right to highlight the importance of legal advice, and we support their recommendation for clear audit trails – that will hopefully save schemes having to revisit these rule changes in another 20 years. In the meantime, it is helpful that TPR has confirmed that an absence of a s37 confirmation for a previous amendment, or use of the remedy, is not generally a reportable matter. This should help to keep the whole process as smooth and painless as possible.”
Sonya Fraser, Partner at Arc Pensions Law, said: "The Regulator’s guidance is a useful reminder to trustees of their duties in relation to assessing the impact of the Virgin Media judgment on their own scheme, taking the necessary advice, making informed decisions and ensuring that there is a clear audit trail. The guidance points out that while the remediation will not be available until Royal Assent is given, trustees can instruct their actuaries to start the work now. That is consistent with what we are seeing, particularly for schemes that are preparing for buy-in or buy-out. The guidance builds on the pragmatic stance that has been taken on this issue by the industry to date - including the recent FRC actuarial guidance. For example, it states that the Regulator does not expect trustees to 'carry out exhaustive searches before your actuary undertakes the remediation work'. The Regulator also does not expect to receive reports from trustees regarding the actions that they have taken in respect of remediation."
TPR guidance on retrospective actuarial s37 confirmations
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