From 2028, defined-contribution arrangements will publish an annual Value for Money rating — green, amber, or red — under the FCA and TPR regime set out in CP26/1. The rating is structured around three dimensions: investment performance, costs and charges, and service and quality. It will be the most visible feature of every workplace DC scheme's annual reporting cycle. It is also, on its own, an incomplete answer to the question members and IGCs are actually asking.
What the rating tells you
The rating tells you whether an arrangement, on the regulator's defined dimensions, is delivering value at a level the regulator considers acceptable. Green is acceptable; amber requires action and remediation; red requires urgent action and likely transfer of members to a better-performing arrangement. The rating is comparable across arrangements because the dimensions and the calibration are the regulator's, not each provider's.
What the rating tells you, in other words, is where the arrangement sits on the regulator's three dimensions, in a comparable way, at a moment in time. That's a meaningful and previously-absent piece of information. For IGCs reporting to members and to the regulator, it's the headline answer to the question "is the arrangement performing acceptably?"
What the rating doesn't tell you
The rating doesn't tell you what the arrangement is delivering for the members in it. It doesn't translate "green on costs and charges" into "the average member retiring next year is on track for the income they planned for." It doesn't say what the distribution of member outcomes looks like — the headline figure can be acceptable while the experience of members in the lower half of the distribution is not. It doesn't address heterogeneity: a scheme with members of very different welfare profiles can score acceptably on regulatory dimensions while delivering markedly different value to members at different points in the distribution.
This is not a criticism of the regulatory framework. The rating is doing the job the regulator built it to do — comparable assessment on defined dimensions. The question for IGCs is what additional analytical layer is needed to translate the rating into the answer that the Annual Statement narrative needs to give to members.
What the Annual Statement actually needs to say
An Annual Statement that goes beyond the rating tells members three things the rating itself doesn't. First, what the arrangement is delivering for members in their welfare context — not on average, but heterogeneously. Second, where the arrangement sits on the dimensions that affect lifetime member outcomes, not the regulatory year. Third, where the IGC's judgement is that improvement is possible, with the analytical apparatus to distinguish between cosmetic and substantive remediation.
This is not a regulatory requirement. It is the work an IGC takes on when its members deserve more than a rating. The substantive work is analytical: bringing welfare characterisation, distributional analysis, and lifetime outcome modelling into a form that informs the Annual Statement narrative.
Where this leaves IGC chairs ahead of 2028
The first reporting cycle is closer than it looks. IGC chairs preparing for it have a choice: build the analytical layer that translates the regulatory rating into substantive Annual Statement content, or accept that the Annual Statement narrative will rest on the rating alone. Most IGCs will pick the first option but underestimate the analytical work involved. By the time the work is needed it will be too late to specify it well.
Where Congruent has been engaged on Value for Money work ahead of the in-force cycle, it is by IGCs and providers who have read the regulatory framework carefully and concluded that the rating-only Annual Statement is not the answer they want to give their members. The conversations at this stage are about what the analytical layer should contain, what data is required, and what the Annual Statement narrative would look like with it in place.
Last updated May 2026.