Pensions Weekly Update – 19 February 2025

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

• The Institute of Chartered Accountants in England and Wales (ICAEW) has published a help sheet for auditors and scheme sponsors of defined benefit (DB) pension schemes in light of the recent Court of Appeal decision in the Virgin Media case. The ICAEW notes that, bearing in mind the current uncertainties, auditors must consider what impact (if any) the ruling may have on their risk assessment and planned procedures, as well as the auditor’s report. The ICAEW recognises that many sponsors have year-end dates of 31 December and are currently facing questions from auditors. The help sheet explores what scheme sponsors may wish to consider in determining how to address the ruling in their financial statements. The ICAEW understands that most trustees will not have made a detailed assessment of the issues and that, based on legal advice, they are likely to take a watching brief approach pending any intervention by the Department for Work and Pensions and the outcome of future court cases. The ICAEW provides some suggestions for taking that approach into account as part of the audit process. Trustees that are asked to share legal advice with sponsors and auditors should consider the effect on legal privilege and seek advice as needed on the terms of any disclosure and any action that may be appropriate in their scheme’s circumstances. The case of Verity Trustees v. Wood is currently underway and is expected to address some of the issues not ruled on in Virgin Media.
• Nausicaa Delfas, chief executive of The Pensions Regulator (TPR) has issued a blog post setting out TPR’s vision for 2025. TPR encourages early engagement from scheme advisers and administrators to prevent problems – “We are not interested in just putting out fires. We want to stop things catching alight in the first place.” An innovation hub will be launched to facilitate open discussion about potential new pensions models.
• The Pensions Data Project has issued a report resulting from a data-matching exercise carried out on 76 million pensions member records held by five master trusts between 2019 and 2022. The findings will help to inform work on the consolidation of small defined contribution (DC) pension pots and will also be useful for pensions dashboards. Separately, the Institute for Fiscal Studies has published a report on the proliferation of small DC pots and the merits of different policy responses to address this problem.
• A new statutory right for employees to take paid leave from work if their children are admitted to neonatal care will be coming into force from 6 April. This briefing note sets out outline answers to the key questions that employers are likely to have about neonatal care leave and pay.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.