I agree We use cookies on this website to help us provide the best user experience. By browsing this site you agree to their use - more information is available here.

Barnett Waddingham
0333 11 11 222
All those involved with governing defined contribution (DC) pension schemes should assess the scheme they run on a regular basis to ensure if offers Value for Money (VFM).  For trustees this is a regulatory requirement, for others it forms part of best practice.

A key part of the assessment is whether costs and charges borne by the members represent good value for them (Value for Member).

A scheme offers value for money where the costs and charges deducted from members provide good value in relation to the benefits and services they receive, when compared to other options available in the market. For instance, if your scheme has higher costs and charges it should offer improved benefits and services.’ The Pensions Regulator, April 2015

Carrying out a ‘Value for Money’ assessment

A VFM assessment needs to incorporate a wide range of areas and components to understand what members value most to know whether the scheme over all succeeds in offering ‘value’.

Both Absolute VFM (based on schemes own merits and benefits) and Relative VFM (comparing the scheme with its peers) needs to be reviewed under the assessment as both are of use to the trustees and company.

Below we highlight the step-by-step process we take in carrying out a VFM assessment.

  • agree scope for assessing VFM
  • data/information gathering
  • market/competitor research
  • analyse data and information against criteria
  • draw conclusions and recommendations for the trustees

Our report provides the independent assessment trustees require to ensure that their scheme provides both Value for Money and Value for Members and provides a clear list of action and priorities for trustees.

Want to find out more?

Our blog explores what VFM means for your scheme

Related knowledge and resources

Blogs

  • Picture for DC should stand for 'decent contributions'
    DC should stand for 'decent contributions'

    In recent years, regulators have put so much emphasis on the minutiae of defined contribution pensions that we seem to have forgotten about the bigger picture.

  • Picture for One bold step for DC trustees
    One bold step for DC trustees

    Damian Stancombe discusses the enormous responsibility faced by trustees of defined contribution schemes. Damian explores how research and engagement on short to medium term financial issues has got to be the starting point on that journey.

  • Picture for The financial wellbeing department
    The financial wellbeing department

    Mark Futcher and Jonathan Watts-Lay, director at Wealth at Work offer their own compelling insights into the changing face of the retirement landscape in this interview with PMI TV.

  • PerioDiC - October 2018

    Our Autumn PerioDiC newsletter summarises the trustee, company, and other elements to be aware of which help with running a defined contribution (DC) scheme.

  • PerioDiC - May 2018

    Our Spring PerioDiC newsletter summarises the trustee, company, and other elements to be aware of which help with running a defined contribution (DC) scheme.

  • PerioDiC - Occupational DC Schemes

    Whether you are a trustee running an occupational scheme, a company offering a master trust scheme or a contract-based scheme, these newsletters help to keep you up to date with elements relevant to your DC arrangement.

  • Dec 19 2018
    DC infrastructure: the Mitchells & Butlers case study

    We examine the pension scheme journey of Mitchells & Butlers, one of the largest operators of restaurants, pubs and bars in the UK. Both company and trustees worked together to deliver a market-leading DC scheme with better outcomes for members at its core.

    Location: http://bit.ly/DCinfrastructure

  • Nov 30 2018
    In your members’ shoes: the corporate overview

    At our DC Conference, we helped delegates understand the experiences, challenges and thought processes of their members to enable them to make better decisions for their scheme – truly putting themselves in their members’ shoes.

    Location: http://bit.ly/inyourmembersshoes

Updates delivered to you

Stay ahead with our latest comment, expert insight and event details.