“Our rationale for this was that the inclusion of employer subsidies would provide a more comparable metric.”
In addition, it said that schemes should disclose the total amount of administration costs to enable comparison of the quality of their services against the cost of those services.
Laura Myers, partner at LCP and head of the firm’s DC practice, said: “We believe that introducing a dedicated framework will help to underline the importance of VFM and focus the attention of governance bodies on delivering good outcomes for savers."
“The VFM process must not be another cumbersome compliance document for pension schemes which could potentially mislead savers by presenting incomplete information on the costs and charges they pay for their pension provision.”
Myers said the framework presents a real opportunity for the pensions sector, not only to improve the VFM delivered to savers but also the information reported to them.
“Properly implemented, a new framework could be the basis for a more informative, member-friendly report to replace the annual DC Chair’s Statement, which has become a ‘tick box’ exercise for pension schemes and is rarely read by savers,” she said.
“We hope the government continues to listen to the industry as this is implemented.”
sonia.rach@ft.com
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