Government stance on VFM hardens – the cutter awaits

Yesterday’s 4 hour marathon Zoom organized by Stephen Glover revealed the iron fist behind the DWP’s velvet glove. The velvet glove was on show through two accomplished contributions from TPR (Louise Sivyer) and the DWP (Andrew Blair) and the iron fist delivered through what they said.

In a room where the average age of delegates was well over 50, the tone was set by two senior policy makers half our age and I found this refreshing. There has been something very tired about the VFM debate to date. Much of what was said had no bearing on member outcomes but that could not be said of either Sivyer or Blair’s pronouncements.

The opening poll of the conference suggested we were in for more wrangling about charges, caps and industry navel-gazing. The closing poll (from a remarkably loyal group of delegates) showed the dial now pointing at value , investment performance and improving member outcomes. This was an achievement of the conference and of its key speakers.


Joined up regulation

The Pension Regulator has moved past its 32 characteristics of a DC scheme to a four pillar temple built on reasonable charges , where VFM is supported by good governance, well run administration , strong investment performance and clear communication. I may take issue with the color scheme but not the concept.

Together governance, admin and communications form the ‘service’ package in TPR’s trust based world

This is not quite the formulation of the FCA , where there is less emphasis on formal governance and more on “quality of service” but the twin drivers of low cost and strong investment performance are common to both. Let’s hope that what  now looks a joint production between the FCA and TPR in response to CP20/9, arrives in this quarter.

Regulation of forthcoming legislation


The Pension Regulator’s DC agenda is at last aligned with what savers want and need. I virtually applauded each of these bullets as they landed. There is an urgency and dynamism about the tone at TPR that has been absent till now.

The cutter awaits

If Lou was urgent , Andrew Blair was equally dynamic. His team are charged with writing the legislation that will require DC trustees to  demonstrate value delivered or develop a clear plan to improve  or a decisive plan to clear off.

I am no fan of the DWP’s current measure “net performance” and if you read Annexe E of its current consultation you can see why.  My hope is that the DWP will use the forthcoming statutory instruments (due late June) to introduce alternative ways of measuring value which assess member experience.

But whatever the way, the DWP’s decision to intervene and accelerate the demolition of small occupational DC schemes has clearly been made. The cutting room floor is littered with celluloid from a past era, the future is digital. Bob Compton’s excellent history lesson on how small schemes came and now should go, may have lasted longer than Andrew Blair’s statement but together they were a highlight of the conference.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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