DC Value for Money (VFM) is a government and regulatory initiative to create a framework through which all workplace DC schemes will disclose a standardised set of metrics, which will form the basis of mandatory comparisons against other schemes and self-assessments of value.
The comparisons will make use of metrics in three key areas: investment performance, costs and charges, and service and administration quality. Where a scheme is assessed as not offering good value, it will have to improve or, in some circumstances, close and transfer members to a better value scheme.
The PLSA has worked with government and regulators on VFM for some years to help shape a framework that is both practical and proportionate, and will be most effective at improving value. Some of our priorities have included reductions in metrics in certain areas, pushing to avoid the use of metrics (e.g. on service quality) which would result in misleading comparisons, as well as explaining the importance that the unique value offered by own trust schemes is not overlooked. Following the FCA’s consultation in 2024, we are now in discussions with regulators on further amendments to the framework, ahead of VFM’s inclusion in the 2025 Pension Schemes Bill.