The Court of Appeal ruled on the “s37” validity issue in June. Since then the industry is seeing a move from the “wait and see” approach to trustees and employers actively taking a sensible step-by-step approach to ascertain if their schemes are affected.

It has been four months since the Court of Appeal handed down its judgment, and in this article, we look at what movement we have seen in the industry.

If you want further information on the background of the case and the appeal, see our article: ‘Virgin Media s37 appeal dismissed – time for trustees to act?’

We are seeing trustees undertake initial fact finds (if they haven’t already been done) to identify what deeds are within scope and whether those deeds contain a s37 confirmation.  Once an initial fact find is done, if there is doubt (as amendments are not necessarily void if there is no s37 confirmation physically attached to the deed – it may be held elsewhere) trustees can then take more informed and focused investigations on what documentation has survived and the potential impact that will have on scheme benefits.  Employers are also taking an interest and, in some cases, doing their own investigations on s37 as this issue is being included in company audits.

Many advisers will have provisions within their terms of engagement that say they will not look into issues, particularly those surrounding validity, without express instruction to do so.  Trustees should, therefore, be conscious that if further investigations are to be undertaken, they should engage with their advisers.

There was hope that the DWP would step in and remove the uncertainty by using a statutory power to remove the unintended consequences of the way s37 operates. DWP invited the pension industry to provide evidence about the impact the judgment could have on schemes.  DWP since that request has been quiet on the subject and is likely reviewing the industry input.  There is still hope that intervention may come but there is no guarantee, so schemes should not rely on this happening before taking their next steps.

Key takeaway

If you are a trustee and have any concerns about if your scheme is affected and the next steps, our team of experts can help guide you through the issue.