Pensions Bulletin 2024/33
Pensions & benefits Policy & regulation DC pensionsThis edition: TPR encourages DC trustees to engage with FCA’s VFM consultation.
TPR encourages DC trustees to engage with FCA’s VFM consultation
The Pensions Regulator (TPR) has published a blog explaining why it believes that trust-based schemes must “seize this opportunity to shape one of the biggest revolutions in pensions policy since auto enrolment” by engaging with the Financial Conduct Authority’s consultation on its Value for Money (VFM) framework (which closes on 17 October - see Pensions Bulletin 2024/31)
TPR says that it can’t deliver a change from focussing on cost towards improving value for savers alone and that it doesn’t want to. Instead TPR wants to work with industry to ensure the VFM framework will:
- enable effective competition between schemes and facilitate employer choice;
- reduce the number of savers with workplace pensions that deliver poor value; and
- drive better value across the whole workplace DC market.
Therefore, TPR is encouraging master trusts – which account for 95% of active memberships in DC trust-based pensions – and large single-employer trusts to adopt the framework early in order to inform the legislative regime that will follow in the Pension Schemes Bill.
TPR goes on to highlight several areas where it particularly wants to hear from respondents. These include how best to measure quality of service and issues surrounding the use of forward-looking metrics.
Comment
This blog is a further indication that, as we have highlighted before, TPR is working closely with FCA on this consultation. If any readers are in doubt about how seriously the regulators are taking the topic of VFM then this quote from the blog’s final paragraph should make it clear: “This consultation is a real opportunity for industry to have their say on a framework that could have as big an impact on pensions as auto enrolment did”.
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