Is AAF fit for today? What should Trustees be considering?
Is AAF fit for today? What should Trustees be considering? AAF 01/20 reports began appearing
Value for Money (VfM) – Should I Stay or Should I Go Now?
There is a great deal riding on the Value for Money (VfM) framework. Assessments and ratings are likely to carry significant commercial and reputational implications for providers and will no doubt influence employer decisions about scheme selection. This will inevitably increase accountability across the market and drive further consolidation as weaker arrangements come under pressure.
In a previous article we discussed the upcoming VfM framework and how it will reshape the DC pensions market. Following the recent joint consultation from the FCA, TPR and the DWP, the direction of travel is now clearer, and schemes and employers should be starting to think strategically about what this means for their arrangements.
For employers using master trusts or contract-based arrangements, governance responsibility does not disappear. Many employers moved to these arrangements expecting governance to sit largely with the provider, but the VfM framework changes the dynamic.
Employers will increasingly be expected to demonstrate oversight, understand performance and service metrics, and challenge providers where value is not being delivered. This will require greater visibility of data, clearer governance structures and a more active role in ongoing provider monitoring. Understanding what sits behind the VfM metrics – including investment strategy, forward-looking projections, member engagement and retirement support – will be key to interpreting results properly. At Pi Partnership, we are already seeing this become an increasingly important discussion point for employers and trustees.
Outcomes will also depend on decumulation solutions, guided retirement services, modelling tools and how providers support members in making retirement decisions. Many of these developments are interconnected and will play an important role alongside future VfM assessments and ultimately member outcomes.
The VfM framework is therefore not just a reporting exercise. It is prompting employers and trustees to step back and ask a more strategic question.
‘Does our current DC arrangement deliver the best possible outcomes for members, or should we be considering a different approach?’
At Pi Partnership, we are working with trustees and employers to assess governance requirements, provider performance and future decision points ahead of the first VfM assessments. This includes reviewing investment and retirement offerings, understanding fees and services metrics, and working with employers to establish and run oversight committees and governance processes that allow for independent and constructive challenge.
Recent Articles
Read More »
What does a pensions scheme data cleanse project really mean?
Pension scheme data cleansing goes beyond correcting member records. It involves reviewing scheme documents, understanding past decisions and addressing issues that can affect members’ benefits. From a professional trustee’s perspective, this article explores why projects become complex and how expertise, constructive challenge and timely decisions help trustees navigate them.
Why data quality underpins your scheme’s governance and compliance
Good-quality pension scheme data is fundamental to effective governance, compliance and risk management. As systems become increasingly interconnected and AI adoption grows, trustees must understand how data is managed, shared and scrutinised to support better decisions and member outcomes.
