Pensions - Articles - SPP backs VFM framework with proportionate implementation

Yet the SPP is calling for greater clarity on the framework’s scope, particularly for AVCs, hybrid schemes, single employer trusts and future coverage of non-workplace, decumulation and collective defined contribution (CDC) arrangements.

 

It also supports the revised approach to investment performance but believes historic performance should carry greater weight than forward-looking metrics, with the latter capped at around 30% to avoid undue reliance on projections.

 

The SPP response also welcomes the proposal to assess decumulation strategies separately, recognising that investment approaches for annuity purchase, drawdown and other retirement solutions cannot always be meaningfully compared on a like-for-like basis.

 

The SPP urge regulators to retain a proportionate approach beyond the first year, particularly for single employer trusts, bespoke, legacy and non-commercial arrangements, and to guard against league-table behaviour and excessive convergence in investment strategies.

 

Dr Amanda Cooke, Chair of the SPP’s Financial Services Regulation Committee, said: “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.”