The Financial Conduct Authority (FCA) will consult on rules for a new value for money (VFM) framework for DC workplace pensions.
Happening in Spring 2024, the framework will look to shift the focus from cost to longer-term value, ensuring transparency and delivery of VFM in the market.
The FCA is working alongside the Department for Work and Pensions (DWP) and The Pensions Regulator (TPR) to ensure the framework is consistent across all DC schemes.
To read more on this topic, visit: Autumn Statement 2023: Consultation to be launched on creation of pension ‘pot for life’
All DC schemes will be required to test their theories against competitors to ensure they deliver long-term value for savers. This includes those who can invest in diversified investment strategies.
This comes as the FCA acknowledges that short-term cost can dominate decision making within DC schemes.
As well as following on from earlier joint papers with the DWP and TPR.
This news comes as Chancellor Jeremy Hunt announced in the Autumn Statement that he would be launching a consultation looking into creating pension ‘pots for life’, allowing employees to choose which scheme their pension is paid into.
