On 16 September 2021, the Pensions Regulator and the FCA jointly issued Discussion Paper 21/3: Driving Value for Money in defined contribution pensions (DP21/3). In DP21/3 the regulators discuss developing a common framework for measuring value for money (VFM) in defined contribution (DC) pension schemes. The aim of the two regulators is to drive a long-term focus on VFM across the pensions sector.

The common framework will also allow trustees and independent governance committees to compare their scheme’s costs and charges, investment performance and service standards with similar offerings from other providers. Disclosures alone will not address the difficult issues surrounding VFM in pensions. Improving data disclosures will be a starting point and the regulators will continue to work with stakeholders to improve saver outcomes over the longer term.

The deadline for comments on DP21/3 is 10 December 2021.

The regulators will publish a feedback statement setting out next steps in 2022.