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Summary
FCA/TPR seek input on VFM regime—consultation closes March 8, 2026.
Regulations enable unconnected employers to join CDC schemes; TPR consults on an updated code.
High Court approves compromise rectifying defective scheme amendments.
European Commission extends UK data adequacy decisions to December 27, 2031
Plus: parental bereavement changes; dashboards guidance and consultation; and looking ahead to 2026.
Value for money consultation
The Financial Conduct Authority (FCA) and the Pensions Regulator (TPR) have published a paper on the proposed value for money (VFM) framework. The principle behind the VFM framework is to enable meaningful assessment and comparisons of VFM, so that all savers receive value by default. Underperforming schemes will be expected to improve or transfer their members and wind up. The first VFM assessments are expected to be required in 2028.
The paper provides the FCA's response to its earlier consultation plus a further consultation on detailed rules and guidance for contract-based schemes (which will be implemented via the FCA Handbook). The aim is to produce a framework that is consistent across both trust-based and contract-based workplace pensions, so the paper also acts as a discussion paper seeking input on areas where criteria or context may differ for trust-based schemes. This will help shape regulations to be made for trust-based schemes once the Pension Schemes Bill is enacted. Areas covered by the consultation include:
- Scope: the requirements will initially apply to default and quasi-default arrangements, with possible exceptions for schemes with small membership numbers, schemes in wind-up, or where members will be transferred out of a default arrangement without consent.
- Investment performance: the FCA is now proposing forward-looking, as well as backward-looking, performance metrics, plus some simplification of data requirements.
- Asset allocation disclosures: the paper seeks feedback on any difficulties in providing asset allocation information and the FCA and TPR are undertaking separate data collection exercises to inform this.
- Costs and charges: requirements here have been streamlined, including removing 15-year disclosures and focusing more detailed requirements on the one-year reporting period.
- Quality of service: two administrative metrics (savers can be confident that transactions are secure, prompt and accurate; and savers are satisfied with the service they receive) have been retained, subject to minor changes. However, proposed metrics on how savers engage with their pensions have proved more challenging; they will not be included at launch but will be developed in consultation with industry.
- Assessment: the paper includes an updated assessment process with a four-point rating system rather than the previous red/amber/green classifications.
- Disclosure: one of the key new proposals is to create a central VFM database which would hold all relevant VFM data from a commercial market comparator group (comprising, broadly, open contract- and trust-based multi-employer arrangements—not single employer trusts), to enable easier access and wider comparisons. Further consideration is being given to issues around access to and searchability of the underlying data. The paper includes other disclosure proposals; for trust-based arrangements, TPR intends the VFM assessment report to be a standalone document, not part of the Chair's statement.
- Actions following a poor value rating: a few changes have been made to the consequences of a 'poor value' rating, largely to align contractual schemes with the position under the Pension Schemes Bill.
The consultation closes on March 8, 2026.
Read the consultation paper and TPR's statement.
Regulations and draft code on CDC
Regulations allowing unconnected employers to participate in Collective Defined Contribution (CDC) arrangements will come into force on July 31, 2026. In a CDC scheme investments are held in, and benefits paid from, a collective fund, with the aim of achieving better returns and outcomes through scale. The regulations make amendments to the current CDC framework to make it suitable for use by unconnected entities. TPR is consulting on a new code of practice that will replace the existing CDC code, to make it suitable for these new schemes.
Read the regulations and the code consultation.
High court approves compromise to fix invalid amendments
The High Court has approved a compromise of a complex set of issues relating to the validity and rectification of scheme documents for the Places for People Group Retirement Benefit Scheme (the Scheme). Between 1993 and 2011, a number of actions were taken to limit the liabilities of the Scheme, including a reduction in the accrual rate from 60ths to 80ths, an increase in member contributions, closure to new members in 2004 and closure to future accrual in 2010. Other amendments were made that were beneficial to members.
Several of the deeds of amendment were affected by one or more of: (a) validity issues due to not being properly or fully executed; (b) failure to obtain a section 37 confirmation (the Virgin Media issue); and (c) rectification issues— some of the changes appeared not to reflect the intention of the parties at the time. To complicate matters further, in some cases the validity of a later document depended on the validity of an earlier document or on the provisions of an earlier document that had now been lost and whose terms were now uncertain. The Scheme has been administered on the basis that the changes were valid and effective and in line with the intention of the parties.
Owing to the range of competing interests, and the potential cost and complexity of litigating the issues, the parties agreed to apply to the High Court for approval of a compromise to be binding on all stakeholders. Mr Justice Richards ordered that the settlement be approved and the Scheme documents rectified in the ways requested.
A striking point from the judgment is the description of how the parties approached assessing each of the issues. This involved producing a model that analysed the position at 13 'junctures' in the documentary history of the Scheme, and the probabilities associated with the scenarios that could arise at those junctures. There had also been 'real world' consideration of other potential stakeholders. Richards J commented that the 'rigour of the process which the parties adopted... has produced an eminently reasonable outcome that fairly addresses the interests of everyone affected by the proposed Representation Order'.
European data adequacy decisions renewed
The European Commission has renewed the two 2021 adequacy decisions, declaring that the UK legal framework provides adequate protection for the flow of personal data from the European Economic Area (EEA) to the UK. The new decisions run until December 27, 2031, with the possibility of renewal.
Paternity leave (bereavement) act 2024 comes into force
Regulations have been made bringing the Paternity Leave (Bereavement) Act 2024 into force from December 29, 2025. The Act changes entitlement to paternity leave where the mother or adopter of a child dies, removing the service length requirement and the prohibition on taking leave following shared parental leave. Regulations will bring further changes in the Act into force. We expect these changes to flow through automatically in most scheme rules but schemes and employers should make sure family leave policies and procedures reflect these updates.
Read the commencement regulations and the Act.
Dashboards: benefit illustration guidance and private sector dashboards
The Pensions Dashboards Programme (PDP) has published guidance on the use of (i) benefit illustration objects, (ii) estimated retirement income (ERI) and accrued components; and (iii) dates, to return value data in view responses. It has also launched a consultation on how best to support the delivery of private sector dashboards.
Read the benefit illustration guidance and the private sector dashboards consultation.
Looking ahead: 2026 and beyond
It can feel difficult to keep track of the volume of upcoming developments. Attached to this What's New This Week is our quick guide to what's coming up and what you need to do about it.
