FS23/3: Government-regulator response to ‘Value for Money: A framework on metrics, standards and disclosures'

CP23/4 opened
CP23/4 closed

In January 2023, we published a joint consultation on a new Value for Money (VFM) framework for defined contribution (DC) pensions. See the joint response to feedback received and next steps below.

Read FS23/3

Why we consulted

The FCA, the Department for Work and Pensions (DWP), and The Pensions Regulator (TPR) asked for views on proposals for trustees and managers of DC-relevant occupational pension schemes and the providers, and Independent Governance Committees (IGCs) of workplace personal pension schemes.

The consultation proposed metrics, standards and public disclosure of data required under the proposed VFM framework and proposed use of this data in comparison and assessments of VFM. We also proposed actions for underperforming schemes.

Who this joint response is aimed at:

  • DC pension scheme trustees and managers 
  • Independent Governance Committees (IGCs) of workplace personal pension schemes 
  • workplace personal pension schemes providers 
  • DC pension scheme savers and beneficiaries 
  • pension scheme service providers, other industry bodies and professionals 
  • civil society organisations 
  • consumer organisations / representatives with an interest in pensions capability / financial capability 
  • pensions administrators 
  • any other interested stakeholders

Our joint response

The feedback we received has helped us refine our approach. We’ll work towards implementing the VFM framework in phases, starting with workplace default arrangements in accumulation.

The framework will require DC schemes to provide standard metrics and follow a consistent VFM assessment approach that will help improve performance and saver outcomes. Trustees and providers of underperforming schemes will be required to improve the value they provide to savers or consolidate where this is in savers’ best interests. This will support further consolidation and greater scale in the market for workplace pensions.

The framework has been deliberately designed to shift scheme and employer focus from predominantly cost to a longer-term and holistic view of value, including investment returns. Among commercial master trusts and providers, our proposals aim to improve performance and encourage competition in the interest of savers.


We have worked closely with DWP and TPR to develop the proposed VFM framework and regulatory regime. Our overarching aim is to improve the value savers get from their DC pension. The VFM framework will increase comparability, transparency, and competition across defined contribution (DC) pension schemes, regardless of whether regulated by the FCA or TPR. 

Prior to this consultation and response, the FCA and TPR published a joint discussion paper in September 2021 titled ‘Driving Value for Money in defined contribution pensions.’ 

On 24 May 2022, the FCA and TPR published their Feedback Statement to the discussion paper. This highlighted broad support for the development of standardised metrics and a consistent approach to comparisons of VFM. It also committed to consult on proposals for a VFM framework.

Next steps 

In spring 2024, the FCA will consult on detailed rules for contract-based schemes, working closely with DWP and TPR for consistency with the development of requirements for trust-based schemes.  We will be seeking views on the consultation proposals from both trust and contract-based schemes and will share any relevant feedback with TPR and DWP.

We continue to work closely with industry and have been conducting a series of industry working groups to ensure our detailed proposals are informed by the very best industry practice.