Delivering value for money
Apart from the pension freedoms, another hot topic that's getting a lot of regulatory, public and political attention is value for money.
Even before we limited the charges for auto enrolment qualifying schemes, value for money (VfM) has been under the spotlight. Momentum started to gain when the Office of Fair Trading (now the Competition and Markets Authority) carried out their market study into workplace pensions in 2013.
The OFT found that competition alone could not guarantee that members would receive good value, and made a number of recommendations that ultimately led to the formal introduction of Independent Governance Committees (IGCs) from April this year.
We created our IGC in May 2013, initially with an investment governance brief, but more recently focusing on all aspects of VfM as part of their formal accountabilities. We also limited our charge to 50bps for auto enrolment qualifying schemes using our default investment, improving on the government's standard.
From April 2016, all IGCs will need to publish their first formal governance statements, including their view on whether providers are delivering good value to customers and any actions they'll need to take if they fall short.
Over the last few months our IGC have been working to shape our policy on what VfM means to us, and they're now ready to reveal their View - Statement of intent.
The statement covers a number of aspects including service and investment performance, charges, communications and flexible retirement solutions and sets out, at a high level, the way in which the IGC will make their assessment.
This is just the first step in a journey to solidifying our long-standing culture of offering good value, high quality products to our customers.