Regulators are to require DC pension schemes to publish "clear data" on their performance in a colour-coded format under proposals announced today by the FCA, the Department for Work and Pensions (DWP) and The Pensions Regulator (TPR).

The data will focus on performance, costs and quality of service.

Poorly performing schemes could be closed to new business with pensions moved to better schemes.

If pensions are deemed to provide poor value, firms and trustees must then "fix it" by moving savers to better schemes or driving improvements, the FCA said today. 

Value for money assessments will be shown in a colour rating, with dark green for strong performance, light green for good value, amber for improvement and red for poor value.  

The aim of the proposals is to make it clearer to pension savers how their pensions are performing perform, what they cost and the quality of service.

The regulators said they want people to "get good value...so that poor performing schemes are pushed to improve."  

FCA figures show that over 16m workers have defined contribution (DC) pensions.

The regulator believes that value for money makes a "real difference" for pension savers. Over 5 years, a £10,000 pot could grow to £10,400 in a poor scheme or £15,100 in a high-performing one - 46% more. 

The proposals follow feedback from last year’s pension consultation, with new measures showing what returns and risks savers can expect over the next 10 years. This latest consultation is for decision makers across the DC market, including trustees. 

The new framework will set out : 

• Stronger governance with clear expectations for trustees and providers 
• Clear steps to take when schemes are not giving members good value, including closing them to new business and moving members to better-performing schemes. 

The joint proposals are open for comment until 8 March with final rules confirmed once responses have been considered and are subject to the Pension Schemes Bill receiving Royal Assent.

Sarah Pritchard, FCA deputy chief executive, said: "Good value isn’t just about low costs - it’s about strong performance, good service, and transparency. We want to see a focus on value. By working with government and The Pensions Regulator, we will help secure better returns for pension savers." 

Nausicaa Delfas, TPR chief executive, said: "Millions of people rely on pension income to support them through later life. We have to make sure they get value for their money. This framework will empower decision -makers to either improve their scheme or consolidate out of the market. We want to hear the views of trustees to make sure we get this right and help transform pension saving for millions.” 

Torsten Bell, Minister for Pensions, said: "It is simply too difficult for people to know whether their pension savings are working for them. That's not right when we're talking about something as important as people's security in retirement. 

"These proposals change that. Pension schemes' performance will be public with a simple rating system. In future, savers will know if they are getting a good return or not. "This is about being straight with people and making sure people’s savings work as hard as they did to earn them." 

• The Consultation Paper.