Trustees of workplace defined contribution pensions schemes and the wider pensions industry are being urged to help shape the introduction of a new value for money (VFM) framework.
The Pensions Regulator (TPR), The Financial Conduct Authority (FCA) and the Department for Work and Pensions (DWP) are working in partnership to develop a framework to improve the value schemes deliver for savers and enabling comparisons to be made across the defined contribution pension landscape including contract-based and trust-based schemes.
The FCA has launched its consultation for contract-based schemes ahead of the DWP introducing equivalent legislation for trust-based schemes in an upcoming Pension Schemes Bill.
Nausicaa Delfas, TPR chief executive, said: “We want every pension saver to get value for money from their pensions. That means good investment returns, and high quality services, for a competitive price.
“This is a great opportunity for the pensions industry to help to transform pension saving for millions, and to deliver greater value for their retirement.”
Nina Blackett, executive director of strategy, policy and analysis, said: “Automatic enrolment has meant more people than ever are saving into defined contribution pensions – the challenge now is to ensure they get good value.
“The VFM framework, on which TPR, DWP and FCA have worked together, will deliver a consistent way to assess and compare the value delivered by both trust-based and contract-based DC schemes, improving transparency, consistency and competition.
“We encourage trustees of trust-based schemes to respond to the technical detail of the consultation, with a view to ensuring the final framework can be applied effectively to trust-based schemes.”
The FCA consultation will run until the 17 October and follows confirmation in The King’s Speech that the government plans to legislate via the introduction of a Pension Schemes Bill to ensure all pension savers are saving into schemes which deliver value through the value for money framework. The Bill will establish a standardised test for value for trust-based DC schemes.
Read the digital edition of IPE’s latest magazine
