On 13 July 2026, the Department for Work and Pensions (DWP) published a joint consultation paper (CP26/25) with the FCA on the new value for money (VFM) framework (the Framework).

Background

In CP26/25, DWP and the FCA are seeking views on developing the Framework in relation to VFM for pension schemes regulated by the FCA and The Pensions Regulation (TPR). The Framework has been developed through an iterative programme of consultation and refinement.

This includes:

CP26/25 represents the final set of proposals ahead of implementation. It builds on earlier proposals and incorporates stakeholder feedback to ensure the Framework is proportionate, effective and deliverable, while maintaining a consistent approach across both trust-based and contract-based workplace pensions insofar as possible.

Summary

CP26/25 sets out the main changes proposed in relation to the Framework since consultation CP26/1:

  • Previous proposals set out that all in-scope schemes would complete the full assessment in the first year of the Framework. The revised proposal for a phased implementation so that in 2028, Master Trusts (MTs), large Single-Employer Trusts (SETs) (only those with 50,000 or more members) and all firm designed, open, multi-employer contract-based schemes will complete full VFM assessments and assign ratings, while smaller SETs, legacy and bespoke arrangements will only submit data to regulators, and their data will not be published. From 2029 onwards, all in-scope schemes will be required to complete full disclosure, assessment, ratings and face consequences.
  • Previous proposals set out that in the first year of the Framework, where relevant, data would be collected from January to December 2027. The revised proposals shorten this initial data collection period to July to December 2027.
  • Previously proposals would have required immediate application of consequences for underperforming schemes. The revised propose that no formal consequences will apply in 2028 in direct relation to the VFM Framework, with consequences (including closure measures) only taking effect from the second assessment cycle onwards.
  • Previously views were sought as to when VFM data should be published and the FCA is now now consulting on whether data submitted in March should only be made public in November, after schemes have published their assessment reports.
  • Previously proposals were that all arrangements be assessed against the same commercial comparator group at all year to retirement (YTR) points. The revised proposals look to implement a more tailored approach for the 0YTR point dependent on the decumulation aim sought, whereby arrangements at the point of retirement (0YTR) are compared only with others targeting similar decumulation outcomes (e.g. those targeting annuity purchase compared with those targeting annuities, drawdown with drawdown).
  • Previous proposals took an arithmetic approach to measuring investment performance. The revised proposals suggest a new geometric averaging methodology based on representative members’ actual experience as they move towards retirement.
  • Previously proposals would have required firms and trustees obtain third-party advice on forward-looking metrics (FLMs). The new proposals replace this requirement with mandatory disclosure of underlying assumptions, enabling scrutiny and reducing additional cost for possibly limited benefit.
  • Previous proposals were that each arrangement should be assessed on an employer cohort level in step 1 (investment performance) and against the minimum, median, and maximum investment performance. The revised proposals are that as part of the phased implementation of the Framework in the first year, the multi-employer cohort tables will not be used for assessments, shared 10 with other providers nor made public.

Next Steps

DWP have asked for feedback on the revised proposals by 1 September 2026. The DWP will share feedback with the FCA and TPR.

The FCA expects to publish its policy statement and final rules in Q1 2027. Subject to Parliamentary agreement, DWP intends to publish a response document with the final Regulations by January 2027. TPR will also consult on any necessary codes of practice or guidance.