FS22/2: Driving Value for Money in Defined Contribution Pensions

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Feedback Statement

We set out the feedback that we received on our proposed framework to assess and promote Value for Money in all FCA and TPR-regulated Defined Contribution pension schemes (workplace and non-workplace).

In January 2023, the FCA, DWP and TPR launched a consultation (CP23/4) on the metrics, standards and public disclosure of data required under the proposed Value for Money (VFM) framework and the proposed use of this data in comparisons and assessments of VFM.


Read FS22/2

Why we wanted views on Value for Money

Currently, it is hard to compare investment performance, quality of service, and costs and charges between schemes. We need a consistent framework for assessing Value for Money (VFM) across Defined Contribution pension schemes to help deliver good outcomes for savers.

What we heard

This is a joint TPR-FCA publication with the feedback on the joint discussion paper (DP) we published in September 2021, which invited views on developing a framework and related metrics to assess VFM. It summarises the responses we received but does not provide any policy views in response to the issues being raised. However, we set out some high-level next steps. 

Most respondents agreed that greater transparency of and access to pensions data is needed to support better decision making. But there was a range of views on how to measure and compare different elements of value. The contrasting views reflect the complexities of assessing VFM in pensions. 

Background to our work on driving Value for Money in Defined Contribution pension schemes

A focus on Value for Money (VFM) is a key part of ensuring Defined Contribution (DC) pensions maximise the savings consumers have at retirement.

We aim to promote consistent assessments of VFM, focusing on metrics for the key drivers of VFM to enable meaningful comparisons between schemes.

We believe it is necessary to widen the requirements for firms to disclose data, as well as potentially create a framework for assessments across the entire pensions sector, to drive a long-term focus on VFM.

Read the discussion paper DP21/3

Who this applies to

This feedback statement affects those who are involved in the workplace and non-workplace pensions markets. This includes:

  • pension providers and asset managers
  • the governance bodies of pension schemes, such as trustees of occupational pension schemes, IGCs, and their advisers
  • scheme members and their advisers
  • consumer representative groups

Next steps

We will continue working with industry and consumer representative groups over the coming months before finalising proposals for consultation towards the end of this year. Our planned consultation will be joint with the Department for Work and Pensions (DWP) and The Pensions Regulator (TPR).

Page updates

: Information added Link to CP23/4 added.
: Editorial amendment next steps
: Information added Discussion Paper closed