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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | giugno 2023
This judgment, which confirms that certain rules of a contracted-out scheme cannot be altered without the statutory actuarial confirmation having been obtained and that non-compliant alterations are void, is potentially impactful.
Up until now common practice has been for schemes to have discussed the requirement for certification ahead of making scheme changes. The starting point was “Do the changes affect contracted out rights?”. Schemes, together with their advisers, including the scheme actuary, will have carefully considered this question together with the requirement for confirmation, not as a simple matter of a “must have”. The judgment therefore brings usual processes and practices into question and it does not simply speak to cases where s37 confirmations were forgotten or where it can be inferred from the lack of evidence that no confirmation was obtained.
It is possible that amendments will have been made in good faith on the basis that no actuarial confirmation was required, for example where the changes impacted the future or where the contracted-out rights were not adversely impacted. The judgment is clear that confirmations should have been sought in such situations.
It is entirely possible that the case will be appealed, so there may be a further delay in obtaining clarity on these important issues for schemes. That may be very inconvenient for schemes which are in the process of restructurings, particularly total buy-ins.
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