Authorities have unveiled proposals to mandate a consistent and transparent approach under which pension schemes must carry out value-for-money assessments.
The consultation – being conducted jointly by the Department for Work and Pensions, the Financial Conduct Authority and The Pensions Regulator – initially focuses on workplace default funds used for auto-enrolment. Key elements will be investment performance, costs and charges and service quality.
Value for Money: A framework for metrics, standards and disclosures proposes that schemes disclose investment returns over three, five, 10 and 15 years, if available. It also suggests a forward-looking metric for targeting future investment performance.
Pensions minister Laura Trott said the move aims to improve “the availability and transparency of information and data”, so that trustees can make more informed decisions and employers can compare the performance of different schemes.
Aegon head of pensions Kate Smith said the proposed framework could “transform the pension market and provide better member outcomes, where every pound saved counts”.
