PMI welcomes refinements to FCA’s Value for Money framework but calls for evolution into decumulation
The Pensions Management Institute (PMI) has welcomed the FCA’s revised proposals for a Value for Money (VFM) framework for workplace defined contribution (DC) schemes, highlighting the more proportionate and practical direction regulators have taken.
In its response to the FCA’s consultation on its proposed Value for Money Framework, the PMI notes the positive shift toward forward‑looking metrics, broader comparator groups and a more streamlined set of performance and service measures, all of which more fairly reflect how schemes operate in practice.
However, while supportive of the overall direction, the PMI warns that several important challenges remain. These include ensuring the framework recognises the role of employer subsidies, accurately assesses complex or multi‑employer structures and avoids inadvertently constraining innovation in investment strategies designed to meet long‑term saver outcomes.
The PMI stresses that a framework focused solely on accumulation risks rewarding pot‑size optimisation rather than sustainable retirement income, calling for an expansion into decumulation to reflect the full retirement journey.
Helen Forrest Hall, Chief Strategy Officer at the Pensions Management Institute, said:
“VFM is evolving and it’s welcome that regulators have taken an important step forward, but the system is still in transition, and the VfM framework must reflect that. We can’t rely on backward‑looking metrics when schemes have redesigned their strategies for long‑term value. Forward‑looking measures help, but only if they’re realistic. Above all, pragmatism is essential. With major reforms already underway, VFM must support innovation, not add avoidable complexity,”
Read the PMI’s full response here.
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Notes for editors:
- The Pensions Management Institute (PMI) is the UK’s leading professional body for those working in pensions and retirement savings. With over 8,500 members, the PMI represents the broadest range of pensions professionals and trustees in the country.
- Its members are responsible for managing and advising some of the world’s largest pension schemes, making key decisions on substantial financial matters. With more than £1 trillion invested in UK pensions, PMI members play a vital role in shaping the nation’s financial future. With five decades of experience, PMI remains at the forefront of pensions education and thought leadership.
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