Former pensions secretary Guy Opperman believes the Value for Money framework in its current form should be scrapped entirely from the Pension Schemes Bill, labelling it as “basket case” legislation.
Opperman was pensions secretary from June 2017 to September 2022 as a cabinet member within the then governing Conservative Party. He is now an adviser for pensions administration firm Aptia.
The Pension Schemes Bill introduced by the current Labour majority is due to shortly become law, pending ongoing debate over issued such as the government power to mandate pension scheme investment decisions.
As it stands the VfM framework will operate under a “traffic light” system, with consistent poor performers losing the ability to receive auto-enrolment contributions.
“They made a complete basket case of Value for Money, and they should scrap it and throw it away and start again,” says Opperman.
“It is utterly unworkable, as they have presently proposed it. Sadly, anyone who works in the pensions industry will tell them it’s government by committee. The madness of having two regulators (The Pensions Regulator and Financial Conduct Authority) who don’t talk to each other has made it a really awful example.”
However, Opperman supported “95 per cent” of the bill, claiming that it was in large part a continuation of policy from successive governments, including in areas such as decumulation and small pots reform.
Current pension secretary Torsten Bell has consistently defended the VfM framework, claiming that it centres around “focus[ing] more on value, and less narrowly on cost or price”.
Opperman was in Conservative cabinets across a variety of posts from when David Cameron was prime minister, up until getting fired from the cabinet by then prime minister Liz Truss (and rehired six weeks later by Rishi Sunak).
Of his firing by Truss, Opperman says: “I was quite pissed off about it at the time. But I’m not bitter and twisted about it all, I promise you.”