The Financial Conduct Authority has published CP26/1: The Value for Money Framework: Response to consultation, further consultation and discussion paper, advancing the long-running regulatory agenda to establish a rigorous, objective and transparent framework for assessing value for money in workplace pension arrangements. The consultation is open until 8 March 2026 and represents both a response to earlier feedback and an invitation to refine key elements of the framework ahead of eventual implementation.
Why the VFM Framework Matters
The VFM Framework is designed to transform how workplace defined contribution (DC) pension arrangements are assessed and compared, driving greater transparency, competition and long-term value for savers, moving the market away from a narrow fixation on costs towards a broader evaluation of outcomes, costs, investment performance and service quality.
This work builds on extensive joint regulatory engagement with The Pensions Regulator (TPR) and Department for Work and Pensions (DWP), including earlier consultations in 2023 and 2024 and a feedback response to CP24/16. While the Pension Schemes Bill 2025 will establish the legislative basis for applying the framework across trust-based arrangements, the FCA’s focus in CP26/1 remains on refining the detailed regime for contract-based workplace pensions.
Key Proposals and Changes in CP26/1
CP26/1 responds to industry feedback to make the VFM Framework’s methodology more robust, practical and capable of meaningful cross-scheme comparison. Among the principal proposals:
- Forward-looking metrics: In addition to retrospective measures (such as costs and net returns), VFM assessments would incorporate forward-looking indicators, including expected future performance to give a more complete picture of potential savers’ outcomes.
- Refined metric set: A streamlined set of backward-looking metrics is proposed, focusing on those most relevant and capable of delivering meaningful insight, rather than an extensive list that could dilute comparability.
- Service quality simplification: Proposed service quality metrics have been concentrated to enable further targeted industry engagement on the most impactful measures.
- Market comparators: Rather than comparing an arrangement against three peer arrangements, value assessments would benchmark relative to a commercial market comparator group, supporting a clearer view of relative performance.
- Four-point ratings: Replacing the earlier three-point approach, a four-point rating spectrum is proposed to help differentiate higher-performing schemes more clearly.
These changes represent refinements rather than systemic departures from the original framework but underscore the FCA’s intention to balance rigour with proportionality and usefulness.
Scope: Who Should Respond
The FCA explicitly welcomes views from a wide set of stakeholders, including:
- Firms operating contract-based workplace pensions
- Independent Governance Committees (IGCs) and Governance Advisory Arrangements (GAAs)
- Trustees and sponsors of trust-based schemes
- DC pension scheme savers and beneficiaries
- Pension service providers, industry bodies and consultants
- Employers and civil society or consumer organisations with an interest in pension outcomes
Respondents are invited to submit feedback via the FCA or TPR online response forms or by email or post by the deadline of 8 March 2026.
Discussion Paper: Trust-Based Schemes and Regulatory Alignment
CP26/1 also includes a discussion paper exploring how the Value for Money (VFM) Framework could be applied to trust-based defined contribution schemes, alongside contract-based arrangements. The FCA is seeking views on whether a single set of metrics and assessment processes can work across both regimes, or whether a more tailored approach is required. This reflects wider policy development under the forthcoming Pension Schemes Bill and highlights the importance of regulatory alignment between the FCA and The Pensions Regulator to ensure consistent outcomes for savers and to avoid regulatory arbitrage across the DC pensions market.
Industry Feedback: Context and Market Views
Industry feedback to earlier consultations has been broadly supportive of a more holistic approach to assessing value, particularly one that moves beyond cost to include investment performance and service quality. However, respondents have also cautioned against unintended consequences, including market disruption and overly simplistic comparisons, and stressed the need for close alignment with existing obligations such as the Consumer Duty. The FCA’s revised proposals seek to balance these concerns, with further feedback now invited ahead of continued rule development and a planned implementation timeline ahead of the first VFM assessment cycle in 2028.
How Complyport Can Help?
At Complyport, we provide targeted support to firms navigating the evolving Value for Money framework and associated pension regulatory developments:
- Governance and Reporting Framework Readiness: As the VFM Framework evolves towards implementation, we assist firms in assessing and strengthening internal governance, risk and reporting frameworks. This includes mapping obligations to existing Consumer Duty, TPR governance expectations and data quality controls, and advising on disclosure strategies that align with regulatory expectations while managing reputational risk.
- Data, Metrics and Comparison Preparedness: The framework’s focus on objective metrics and cross-scheme comparisons will require robust data management and reporting processes. We support firms in designing documentation, controls and audit trails to underpin future disclosures, including forward-looking performance indicators and quality measures, ensuring readiness for public reporting and regulatory scrutiny.
- Stakeholder Engagement and Consultation Support: We guide firms through responding effectively to FCA consultations, including CP26/1, helping to frame feedback that reflects operational realities and strategic priorities. This includes preparing structured submissions, interpreting technical proposals, and supporting engagement with trustees, IGCs, GAAs, and other stakeholders to ensure perspectives are clearly represented and considered in the evolving VFM framework.
