The Pensions Regulator (TPR) has issued new guidance relating to the proposed Value for Money (VfM) regime and urged trustees to engage with the ongoing consultation.
The Financial Conduct Authority (FCA) launched its latest consultation on the VfM framework earlier this month, with feedback open until 8 March 2026. The document was produced in partnership with TPR and the Department for Work and Pensions.
Writing on the regulator’s website, Joey Patel, TPR’s director of policy, called for trustees to engage with the consultation. “We need your views to ensure we get it right,” she said. “Your input will help shape the standards that will define saver outcomes for years to come.”
The new VfM framework now consists of a four-point rating system for defined contribution (DC) default arrangements, ranging from the top ‘dark green’ level to ‘red’.
“Millions of people will rely on their DC workplace pensions to support them in later life. We want to ensure they receive good value outcomes – and we know trustees want the same for their members.”
Joey Patel, The Pensions Regulator
In its guidance document, TPR said the new regime was designed to “ensure that industry stakeholders can understand not just the cost of a scheme, but the level of returns and the quality of service delivered to savers”.
For trustees and pension providers, the regulator said the proposed metrics for rating DC schemes should be used to form a view of value and compare this to other commercial options, as well as making improvements if necessary.
In particular, Patel said the regulator wanted trustees’ views on the four-point rating, proposed new forward-looking investment metrics, and a planned centralised data solution.
“Millions of people will rely on their defined contributions workplace pensions to support them in later life,” Patel said. “We want to ensure they receive good value outcomes – and we know trustees want the same for their members.
“The consultation and discussion paper sets out proposals designed to make it easier to assess and compare value across the market to support better decision-making.”
The VfM regime is currently scheduled to come into force in 2028. Primary legislation is expected to be finalised this year through the Pension Schemes Bill, which is currently being scrutinised by members of the House of Lords.
