Government, FCA and TPR publish Value for Money consultation response

The government, the Financial Conduct Authority and the Pensions Regulator published their response to the consultation on value for money in workplace pensions on 11 July 2023¹. The consultation, reference CP23/4, ran from 9:30am on 30 January 2023 to 11:45pm on 27 March 2023 and has now concluded¹.

The original consultation set out proposals to disclose, assess and compare the value for money of workplace pension schemes¹. It proposed key metrics, standards and data disclosures for defined contribution (DC) pension schemes under a proposed Value for Money (VFM) framework, and included proposals for how that data would be used in comparisons and assessments of value for money¹. The consultation document ran to 67 pages¹. The government-regulator response published on 11 July 2023 runs to 84 pages¹.

The Department for Work and Pensions, the Financial Conduct Authority and The Pensions Regulator were named as the bodies behind the consultation¹. The consultation page was first published on 30 January 2023 and last updated on 25 July 2023, when an HTML version of the government response was added¹. The response itself was published on 11 July 2023¹.

Alongside the response, an analysis of the impact of the July 2023 pension package on member outcomes was published¹. The consultation page does not set out the content of the response, the metrics finally adopted, or a timetable for implementation; those details are not reported on the page¹.

Why it matters for households

The consultation concerns defined contribution workplace pension schemes, the type most private sector employees are enrolled into¹. Its subject is how the value for money of those schemes is measured, disclosed and compared¹. The practical effect on any individual saver depends on the rules that follow from the response, and the consultation page does not state what those rules are or when they would take effect¹. No change to charges, contributions or investment arrangements is set out on the page¹.

The bodies involved are the same ones that supervise workplace pensions and conduct in financial services, so any framework that emerges would sit within existing regulation of pensions and financial firms¹. For background on how workplace schemes are supervised, see our guide to The Pensions Regulator, and on conduct rules, our guide to the Financial Conduct Authority. The wider context of pension reforms in progress covers value for money work, and our pensions guide explains scheme types and charges. Value for money in workplace schemes is also scrutinised by Independent Governance Committees.

What happens next

The consultation has concluded and the response has been published¹. The consultation page was last updated on 25 July 2023 to add an HTML version of the response¹. No further dates, including any implementation date for a value for money framework, are given on the page¹.