Encouraging that VFM consultation addresses a number of industry concerns and recognises need for framework to evolve

Commenting on the publication of the consultation on the Value For Money Framework, Lydia Fearn, Co-Head of Pensions Consolidation at LCP, said:

“We welcome the launch of the Value for Money Framework consultation, which builds constructively on the earlier framework design. Further clarity at this stage is important to help the industry prepare effectively for the forthcoming disclosure requirements.

“It is encouraging that the consultation addresses a number of previously raised concerns, including the limitations of relying solely on backward-looking metrics, and introduces a forward-looking element to the assessment of investment returns. Interestingly, following clear feedback from the industry, the overall RAG rating has been refined to a RAGG approach, introducing both “light green” and “dark green” ratings to provide greater nuance.

“We strongly support these developments, as they will be critical to achieving positive long-term outcomes for members. The consultation also recognises the need for the framework to evolve over time, which will be essential to ensure it remains relevant and robust.

“Ultimately, it is vital that the framework is proportionate and focused on supporting good member outcomes, which must remain the central objective.”