The FCA and TPR have proposed a common framework for disclosing information on investment performance, scheme oversight (including data quality and communications), and costs and charges.

The regulators said they see these as the key elements which make up value for money.

The common framework will allow trustees and independent governance committees to compare their scheme with similar offerings from other providers in terms of costs and charges, investment performance and service standards.

The discussion paper builds on the joint pensions strategy published by the FCA and TPR in October 2018, which outlined how the regulators will work together to tackle the issues facing the sector over the next five to ten years. The joint strategy identified the lack of comparable information as a key factor behind the lack of effective competition and value for money in the pensions market.

Sarah Pritchard, executive director for markets at the FCA, said: “Consumers work hard for their pensions savings and it’s important that schemes are really delivering good-value products.

“This issue is a complex one which impacts almost all pension savers so it’s important that we get it right. The proposals will help all those making decisions on behalf of consumers really challenge providers on value and allow better comparisons between products.”

David Fairs, executive director for regulatory policy, analysis and advice at TPR, said: “Delivering value for money in pensions is a key priority for TPR – all part of our work to put savers at the heart of what we do. Regulators, industry and others must be able to effectively assess value for money to ensure good pensions outcomes. The discussion paper sets out our ambitions for an industry-wide VFM assessment framework.

“DC savers rely on the pension system working as best as it can over the lifetime of their saving - every penny counts. That's why independent governance committees and trustees need a framework which provides a holistic assessment of what VFM means - beyond cost and charges - to allow them hold their providers to account and deliver the best possible outcomes for savers.”

The regulators added that disclosures alone will not address the "difficult issues" surrounding value for money in pensions, but that improving data disclosures is the starting point for the regulators to work with stakeholders to improve saver outcomes over the longer term.

The regulators added that they will use the feedback received to the discussion paper to shape further work towards creating a framework to assess value for money.

The FCA and TPR have invited comments on the paper by 10 December and plan to publish a feedback statement setting out next steps in 2022.

The FCA previously published a consultation paper in June 2020 that proposed a more detailed framework for Independent Governance Committees to consider value for money and asked whether providers should have a direct responsibility for value for money. The FCA will be publishing a policy statement drawing on feedback received in that consultation in October.