Glossary · UK
What is Value for Money Framework?
A joint FCA, TPR and DWP framework requiring workplace defined contribution pension schemes to be assessed and compared on investment performance, costs and service, not price alone.
Full Definition
The Value for Money (VFM) Framework is a joint initiative of the FCA, The Pensions Regulator (TPR) and the Department for Work and Pensions to make it easier to compare workplace defined contribution (DC) pension schemes on genuine value rather than headline charges alone. Historically, competition between DC pension providers and the employers choosing schemes for their staff focused heavily on minimising annual management charges, which critics argued could push schemes towards value-destroying decisions — for example, favouring cheaper but lower-returning investment strategies — since charges are easy to compare while investment performance and service quality are not. Under the framework, schemes are required to assess and publicly disclose standardised metrics across three pillars — investment performance, costs and charges, and quality of services — and are expected to consolidate or improve if they are rated as offering poor value, giving employers, trustees and eventually savers clearer, comparable information to judge whether a scheme is delivering good long-term outcomes for the contributions being paid into it.