In this edition of our insight, we cover the Supreme Court’s decision that the definitions of ‘woman’, ‘man’ and ‘sex’ in the Equality Act 2010 refer to biological sex; the latest on Virgin Media and pension scheme accounts; the first provider connecting to the dashboards ecosystem; TPR’s superfunds blog; and details of the new small pots consolidator model.
Gender recognition: Supreme Court rules that Equality Act 2010 definitions ‘woman’, ‘man’ and ‘sex’ refer to biological sex
Decision that was appealed
For Women Scotland, a campaign group representing women’s and children’s rights in Scotland, has successfully appealed a Scottish court’s decision to uphold statutory guidance issued by the Scottish Government in April 2022 which said that, for the purposes of a 2018 Scottish statute, ‘woman’ had the same meaning as under certain provisions in the Equality Act 2010, and included a trans woman with a gender recognition certificate (GRC), a document that allows trans people to legally alter their gender. The guidance related to targets for the proportion of women on Scottish public boards.
The Supreme Court’s decision
In a landmark judgment (For Women Scotland Ltd v Scottish Ministers [2025]), the Supreme Court has held that the statutory definitions of ‘woman’, ‘man’, and ‘sex’ in the Equality Act “can only be interpreted” by reference to biological sex, rather than to certified sex as argued by the Scottish Ministers.
“Any other interpretation would render the EA 2010 incoherent and impracticable to operate.” [paragraph 264]
The decision means that ‘women’ in the Equality Act does not include trans women with a GRC. However, the Court pointed out that its interpretation of the Act does not disadvantage trans people (who do or do not hold a GRC) because they are protected by case law interpretation of the direct and indirect discrimination, harassment and equal pay provisions in the Act. As the Supreme Court noted, for most trans people the legal position remains the same, that their sex is their biological sex – the appeal only relates directly to the small proportion of trans people who have a full GRC (8,464 as at June 2024).
“This conclusion does not remove or diminish the important protections available under the EA 2010 for trans people with a GRC...” [paragraph 264]
Court’s reasoning
The Sex Discrimination Act 1975 (the SDA) introduced protection from both direct and indirect sex discrimination referencing treatment of a ‘woman’ and a ‘man’. The Supreme Court noted that Parliament intended these words to refer to biological sex. Regulations introduced in 1999 amended the SDA to prohibit discrimination on grounds of gender reassignment. The Equality Act repealed and replaced these two pieces of legislation and introduced protection from discrimination based on certain characteristics such as sex and gender reassignment. The Supreme Court held that neither the 1999 Regulations nor the Equality Act altered the meaning of ‘man’, ‘woman’ or ‘sex’ in the SDA.
The Gender Recognition Act 2004 provides that trans people with a GRC should be considered their ‘acquired’ gender ‘for all purposes’ subject to disapplication by that Act or other legislation. The Supreme Court found that the Equality Act is such other legislation. The meaning of the terms ‘woman’, ‘man’ and ‘sex’ in the Equality Act is to biological sex and a “person with a GRC in the female gender does not come within the definition of a ‘woman’” under the Equality Act meaning the statutory guidance issued by the Scottish Government is ‘incorrect’.
The judgment usefully summarises the decision from paragraph 265 and the press summary also contains a helpful synopsis.
Next steps
The Equality and Human Rights Commission (EHRC) that regulates and enforces the Equality Act has referenced the judgment as having “significant implications for the interpretation of Britain’s equality laws.”
The EHRC will be producing an updated Code of Practice during summer and will review other impacted guidance as a ‘matter of urgency’.
The impact on pension schemes will need to be considered in due course as the implications of the ruling are worked through.
Pension scheme accounts and Virgin Media – PRAG discussion paper
The Pensions Research Accountants Group (PRAG) has issued a discussion paper setting out its understanding of the treatment of the FRS 102 Contingent Liability Disclosure requirement and the pensions SORP (2018) in relation to the Virgin Media case. It relates to pension schemes rather than sponsoring employer accounts – see background on the ICAEW guidance on corporate accounts. The paper sets out seven questions for its members and, following feedback, it will publish formal guidance. PRAG members can access the paper through the PRAG publications website.
First pension provider to connect to dashboards ecosystem
On 17 April 2025, the first pension provider connected to the pensions dashboards ecosystem, following the finalisation of three volunteer participants’ direct connection in March 2025. Other providers are due to connect during April under the DWP’s staging date guidance.
Both the Financial Conduct Authority and the Pensions Regulator (TPR) have confirmed that they will not take regulatory action at the present time against a pension provider or scheme who cannot connect by their staging date because of “dependence on a volunteer participant who has yet to connect”.
User testing of the MoneyHelper pensions dashboard will start this summer.
TPR blog on smooth transition to a superfund
In its 23 April blog, TPR reflects on the first three completed superfund transfers against a backdrop of its estimation that, at the end of 2024, around 40% of defined benefit schemes would have satisfied “Gateway tests 1 and 2” and therefore could consider transferring to a superfund. This and other consolidation vehicles such as a master trust are seen by TPR as a positive, providing potentially better access to improved governance, investment and risk management opportunities and cost savings from economies of scale.
TPR uses the blog to address certain misunderstandings and ‘friction’ points it has identified in the transfer process.
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Gateway test 1 – buyout
A buyout quotation is not necessarily needed – an actuarial estimate of buyout cost may well be enough.
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Diligence
Minimal due diligence would not be frowned upon by TPR because it has already analysed those superfunds listed on its website.
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Transfer rationale
There should be a ‘comprehensive rationale’ for the transfer and why it is in members’ best interests, including a robust one where there is ongoing employer support. However, it is not the case that TPR will refuse clearance in ongoing employer support cases.
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Gateway test 3 – transfer improves likelihood of full benefits
TPR does not always expect a mathematical calculation of likelihoods.
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Bulk transfer terms
Following feedback, TPR confirms that it will most likely be satisfied with boundary conditions (where terms need to be reconsidered when key yields fall outside pre-agreed corridors) ending on the date members are told of the transfer.
Next steps: the Pension Schemes Bill will include the legislative framework for superfunds and TPR is also going to produce DB Endgame Options guidance later this year.
Government announces new small pots consolidator scheme for lost pension pots worth £1,000 or less
Following the 24 April 2025 Small Pots Delivery Group Report, the Government has announced its commitment to the introduction of a small pots consolidator scheme to address the issue of the proliferation of small pension pots that many people have lost track of over the years.
As announced in the King’s Speech in July 2024, the upcoming Pension Schemes Bill will introduce the consolidator model. There will be a platform to identify pots for consolidation, criteria for consolidator schemes (automatic enrolment qualification, requisite scale, good value for money, and protection from flat fee charges), and an opt-out option for members. The consolidator will start with pension pots worth £1,000 or less – estimated to cover 13m of the 23m pots worth less than £10,000.
Next steps: Regulations that will introduce certain parts of the required legislation are expected in 2027/28. The Government plans to introduce duties for pension schemes to facilitate the transfer and consolidation of small pots, starting in stages from 2030.