The Society of Pension Professionals (SPP) backs the FCA’s proposed Value for Money framework and phased implementation but is calling for greater clarity and a proportionate approach for different types of pension arrangements.
In its response to the FCA’s consultation, it said it supports measures aimed at reducing the initial burden on schemes and providers, but it wants greater clarity on the framework’s scope.
It also supports the revised approach to assessing investment performance but says historic performance should carry greater weight than forward-looking metrics. It recommends capping the weighting of forward-looking measures at around 30 per cent to avoid undue reliance on projections.
Additionally, it welcomes the proposal to assess decumulation strategies, arguing that investment approaches for annuity purchase, drawdown and other retirement solutions cannot always be meaningfully compared on a like-for-like basis.
The SPP is also calling for a proportionate approach beyond the first year, particularly for single employer trusts and bespoke, legacy and non-commercial arrangements. It warns against league-table behaviour and excessive convergence in investment strategies.
SPP’s Financial Services Regulation Committee chair Dr Amanda Cooke says: “The SPP broadly supports the VfM Framework and its aim of improving transparency and outcomes for members. But value for money should not become a box-ticking exercise or drive schemes towards a one-size-fits-all approach. The framework needs to recognise different scheme structures, member needs and retirement strategies, while ensuring that the costs of compliance remain proportionate to the value it delivers.”
