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On 22nd November, the FCA published a webpage confirming that it will consult on detailed rules for a new value for money framework for DC workplace pensions. This follows earlier joint papers with DWP and TPR on such a framework. The FCA says that the VFM framework has been deliberately designed to shift the focus from cost to longer-term value and aims to ensure transparency and delivery of VFM in the market.
Schemes will be required to test their propositions against others in the market to ensure they deliver long term value for savers, including those with the scale to invest in diversified investment strategies. The FCA's requirements around comparisons will consider the latest evidence on the different potential benefits of scale.
The FCA consultation will be an opportunity for industry and other stakeholders to give their views and any feedback will be shared with DWP and TPR. We support TPR’s immediate focus on the value that customers of trust-based schemes are receiving. Ensuring fair value is a central expectation under our Consumer Duty across firms’ product ranges, including in respect of master trusts.
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