Only large master trusts, single employer trusts and big contract-based arrangements will be in scope for the first value for money (VFM) assessments, which will still take place in 2028, based on 2027 data.
Delaying the roll-out for smaller trust-based schemes and bespoke contract-based arrangements, the DWP says these schemes will be required to complete data returns but will not be made to complete assessments, and their data will not be published.
Publishing a new roadmap for the delivery of pension reforms today, the DWP says the contractual override that will enable contract-based providers to move schemes in bulk without member consent will remain on track to take effect in Spring 2028.
To support the development of R-CDC, the DWP is considering allowing schemes who are committed to pursuing an R-CDC scheme as a default pension, a ‘targeted and time-limited’ extension to allow the scheme to become operational, before beginning to default members into it. It will test a proposal for an extension mechanism at consultation in the autumn.
The FCA will be publishing a discussion paper on introducing equivalent requirements for contract-based workplace schemes, to align with the Guided Retirement framework policy consultation and R-CDC regulations consultation.
The roadmap also includes delivery timelines for small pots consolidation, but says these remain subject to change pending final decisions on the delivery approach.
Kate Smith, head of pensions, Aegon says: “We’re pleased that the Government has listened to the pension industry’s concerns about such a crowded pension reform agenda, the sequencing of the various initiatives, and the impact of implementation resource challenges.
“We’re pleased that the Minister has accepted the need for a ‘test’ period for implementation of the Value for Money framework, something Aegon strongly argued for. However, the full launch timeline has not been put back as we had hoped.
“The first year of the framework (2028) will include just master trusts, the largest single-employer trust-based schemes, and the largest multi-employer contract-based arrangements open to new employers, with no ‘automatic consequences’ based on the assessment outcomes in the first year. The VfM Framework will be extended across the market from 2029, with potential consequences from then.
“Contractual override is critical for pension providers to support the VfM Framework and the scale objectives. As previously planned, this will be available to contract-based providers from 2028, before all default arrangements not open to new employers will have to complete their full VfM assessments. This approach is helpful, but legacy defaults, of which there are hundreds across UK pension providers, will still need to complete extensive data returns.
“We also welcome the two-year delay for schemes to comply with the Guided Retirement provisions, giving time to work through the policy challenges and align with the proposed retirement CDC provisions.
“We agree there is more work to do to ensure that policies are aligned across the pension spectrum for both trust-based and contract-based pension schemes.
“Publishing the roadmap opens up a vital opportunity for discussion, for industry agreement and alignment on the most effective way forward and, ultimately, for the improvement of outcomes for our customers.”
Damon Hopkins, head of DC workplace savings at Broadstone says: “The final set of proposals for the Value for Money framework is an important step towards shifting the focus of workplace pensions away from simply minimising costs and towards delivering better long-term retirement outcomes. By assessing investment performance, service quality and costs together, the framework should encourage stronger competition based on the value schemes deliver rather than headline charges alone.
“The framework has adopted a more pragmatic implementation timetable, with a phased rollout starting with the largest, better-resourced schemes first, a shorter initial data collection period and a delay to formal consequences for underperforming schemes. This gives providers and trustees more time to embed the new requirements effectively and build trust in the framework. The challenge will be ensuring the assessment remains proportionate and robust, with metrics that genuinely reflect the impact on member retirements outcomes and support innovation and investment in assets that can improve long-term returns, and ultimately savers’ financial retirement aspirations.”
The Government has also published a DC roadmap, which confirms that surplus regulations are expected to be made early in the new year and come into force on the 6 April 2027, alongside the tax changes, reflecting its intention to bring forward the full package of reforms together, ahead of the timeline within the earlier roadmap.
On Superfunds, the DWP intends to consult on the regulations early next year prior to the implementation of the permanent regime.
DWP DC ROADMAP
Between January and March 2026
- VfM: TPR and FCA Policy Consultation
Between April and June 2026
- GR: Delivery Group commences
Between July and September 2026
- VfM: consultation on DWP draft regulations and FCA rules published
- VfM: TPR additional guidance published
- CDC: regulations to enable unconnected multi-employer schemes come into force 31 July
- Fiduciary Duty and investment decision making: guidance consultation published
- Small Pots: DWP policy consultation – Building the Foundations for Consolidation published
Between October 2026 and December 2026
- R-CDC: draft regulations consultation published
- GR: DWP policy consultation and FCA discussion paper published
- Contractual Override: HMT Regulations laid
Between January 2027 and March 2027
- Fiduciary Duty and investment decision making: guidance published
- VfM: DWP Regulations come into force and FCA policy statement published in Q1
- Contractual Override: FCA consultation on draft rules published
- VfM: TPR Code consultation published
Between April 2027 and June 2027
- Small Pots: DWP publishes government response and draft regulations consultation – Building the Foundations for Consolidation (tranche 1)
- Scale: report on the effects of consolidation on pension schemes published
- Small Pots: TPR code consultation/FCA rules consultation
Between July 2027 and September 2027
- Contractual Override: FCA policy statement published
- GR: DWP consultation on draft regs and FCA consultation on draft rules
Between October 2027 and December 2027
- Scale: DWP regulations consultation published in autumn/winter 2027
- R-CDC: regulations laid and TPR consult on changes to code
- Small Pots: DWP publish policy consultation – further consolidation considerations (tranche 2)
Between January 2028 and March 2028
- Small Pots: DWP government response to regs consultation and lay draft regulations and Parliamentary process for tranche 1
- Scale: consultations by regulators on code and guidance during 2028
- Contractual Override enabled March 2028
- VfM: TPR Code in force and schemes submit first data to regulators in March
- Small Pots: FCA policy statement published
Between April 2028 and June 2028
- GR: TPR Guidance consultation published (dependent on regs)
- Small Pots: DWP publish government response and draft regulations – further consolidation considerations (tranche 2)
Between July 2028 and September 2028
- GR: regulations made and FCA policy statement published
- GR: publications of FRC’s standards for illustrations for common forms of decumulation options (including R-CDC) plus illustrations during the decumulation phase
Between October 2028 and December 2028
- VfM: first assessment reports and relevant data published in October
- R-CDC: legislation and code come into force and applications for authorisation begin
- Scale: regulations made; applications and assessment periods commence during 2029
Between January 2029 and March 2029
- Scale: Fragmentation Review commences and requirements for new default arrangements to be approved during 2029
- Small Pots: lay draft regulations and Parliamentary process for tranche 2
- VfM: schemes submit second year data
Between April 2029 and June 2029
- R-CDC: estimated date for first R-CDC schemes to be authorised
Between July 2029 and September 2029
- GR: MTs and FCA regulation workplace schemes compliant
Between October 2029 and December 2029
- VfM: second year assessment reports and data published
Between January 2030 and March 2030
- Scale: Fragmentation Review report published during 2030
Between April 2030 and June 2030
- Small Pots: consolidation begins
- Scale: scale threshold and transition pathway commenced
Between July 2030 and September 2030
- GR: SETs compliant
- GR: schemes with R-CDC default pensions compliant
By end of 2035
- Scale: transition pathway ends. All GPPs and MTs to have at least £25 billion
