Verity Trustee v Wood: what the ruling will mean for employers
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What it means for employers
We are expecting the court to rule imminently on the Verity court case (many employers in the not-for-profit sector would also know this as the TPT benefit review).
This will be a significant development affecting many TPT schemes, including the Social Housing Pension Scheme (SHPS) the Growth Plan, the Independent Schools Pension Scheme (ISPS), and some schemes sponsored by individual organisations.
The outcome will affect housing associations, charities, independent schools and other not-for-profit organisations that use those schemes. The range of possible outcomes is very wide – the impact could be very material for some.
What is the Verity Trustee v Wood case about?
Verity Trustees (the trustee of TPT) sought legal clarity on whether historical benefit changes had been implemented correctly.
The court considered issues including:
- Pension increases (in particular which inflation measure to use)
- Retrospective changes
- Timing of documentation changes
- Trustee powers to amend benefits.
What could the ruling mean for your organisation?
Costs and funding
- If the judge rules that some past changes have not been implemented correctly, liabilities are expected to increase. Any impact will likely vary significantly between employers.
- Any additional costs are likely to feed into subsequent valuations and future contributions.
- Some employers and schemes have already built contingency measures into Recovery Plans agreed as part of past valuations, so those contributions may begin automatically.
Accounting
- Any increases in liabilities will likely need to be reflected as a one-off past service cost in employers’ income and expenditure accounts.
- There may be knock-on impacts on reported KPIs.
What should you do now?
- Read our blog for further details - The Verity Trustees v Wood court case: what not for profit organisations can do to prepare
- Ensure your executive team is aware of the potential implications
- Sign up for further LCP updates, roundtables and events - Subscribe to LCP emails
How LCP can help
We can help you to:
- understand the background to the court case
- communicate with key stakeholders
- quantify your own potential exposures to additional liabilities
- assess funding and implications on KPIs and;
- review your long-term pension strategy to ensure it aligns with your organisation’s objectives and takes advantage of new options that are becoming available to employers through wider developments in pensions legislation.
Please do get in touch with us if you would like to discuss next steps.
Get in touchYour questions answered
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Verity Trustees v Wood is a High Court case brought by Verity Trustees Limited, the trustee of The Pensions Trust, to confirm whether historical benefit changes were implemented correctly. Also known as the TPT benefit review, it covered issues including pension increases (in particular which inflation measure to use), retrospective changes, the timing of changes to documentation and the trustee's powers to amend benefits. The hearing took place in February and March 2025, and judgment is expected in 2026.
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The ruling could affect many employers that participate in TPT defined benefit schemes, such as the Social Housing Pension Scheme (SHPS), the Scottish Housing Associations' Pension Scheme (SHAPS), the TPT Growth Plan and the Independent Schools' Pension Scheme (ISPS), as well as organisations that sponsor their own TPT scheme. Most are housing associations, charities and independent schools. The impact on each employer depends on its membership and the benefits it offers.
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If liabilities do increase as a result of the ruling, the impact on individual employers will vary.
Any additional costs are likely to feed into subsequent valuations and future contributions. Some employers and schemes have already built contingency measures into Recovery Plans agreed as part of past valuations, so those contributions may begin automatically.
For accounting, the increase in liabilities will usually be recognised as a one-off past service cost in the income and expenditure account, which may affect reported KPIs.
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