Eleven Independent Governance Committees (IGCs) of workplace pension providers are collaborating in a benchmarking research project to assess pension scheme member attitudes to ‘value for money’ and better understand what they mean by the term.
The project is being co-ordinated by law firm Sackers, with research being carried out by NMG Consulting.
The organisations collaborating on the first wave of this initiative are Aegon, Aviva, Fidelity International, Legal & General, Old Mutual Wealth, Prudential, Royal London, Scottish Widows, Standard Life, Virgin Money and Zurich.
The project is expected to enable participating IGCs to compare how well their provider is doing compared to the average across the pool on a range of metrics. However, rankings will not be made public.
IGCs have already produced their first annual reports, following FCA rules requiring the committees to be set up by April 2015. Under the FCA requirements, IGCs must act independently of their provider. IGCs have specific primary duties to act in the interests of scheme members, to make an objective assessment as to whether members are receiving ‘value for money’ from their workplace personal pension arrangements and to report on their findings.
Sackers associate director Jacqui Reid says: “All IGCs, and their providers, are clear that value for money is about maximising good member outcomes. However, pinning down the components of it and how you measure them has proved harder. Many of us agree that, although fair charges are important, there is much more to achieving good member outcomes than price. IGCs are here to act in the interests of their members. It is therefore vital to enable them to carry out their role effectively that they understand what members themselves, and not just the pensions industry, value. This is an exciting project which has great potential to inform our thinking and improve member outcomes across the contract-based pensions landscape and beyond.”