The FCA and Department for Work and Pensions (DWP) have issued a joint consultation on draft rules and regulations under the Value for Money (VFM) framework.
The VFM framework aims to shift the pensions market focus from solely cost to overall value. This consultation builds on and amends previous proposals published in January, which itself proposed changes as against a previous consultation. Key changes in the latest consultation include:
- Phased implementation: the FCA and DWP previously proposed that all in-scope schemes would complete a full VFM assessment in the first year of the framework. They now proposed a phased implementation over 2028 and 2029.
- Data collection: rather than collecting relevant data from January to December 2027, the FCA and DWP now proposed shortening the initial data collection period to July to December 2027 to ensure sufficient lead-in time.
- Data publication: the previous consultation sought views on when VFM data should be published. Now, it is proposed that data submitted in March should only be made public in November, after schemes have published their assessment reports.
- Assessment framework: it was previously suggested that all arrangements be assessed against the same commercial comparator group at all year to retirement (YTR) points. The FCA and DWP now propose a more tailored approach for the 0YTR point dependent on the decumulation aim sought.
- Forward-looking metrics (FLMs): rather than requiring firms and trustees to obtain third-party advice on FLMs, they would now be subject to mandatory disclosure of underlying assumptions, enabling scrutiny but reducing costs.
The consultation closes on 1 September 2026.