The Trustee reviews all member-borne charges (including transaction costs where available) annually, with the aim of ensuring that members are obtaining value for money given the circumstances of the Scheme. The most recent value for members’ review took place on 1 May 2020. The assessment was undertaken taking account of the Pensions Regulator’s Code of Practice No.13 (Governance and administration of occupational trust-based schemes providing money purchase benefits) and accompanying guidance.

There is no legal definition of ‘good value’ which means that determining this is subjective. The Trustee notes that value for money does not necessarily mean the lowest fee, and the overall quality of the benefit received by members was also considered in this assessment. The assessment was undertaken with assistance from the Trustee’s DC consultant and involved a wide assessment of value considering the key elements of the Scheme and agreeing relevant value ratings for each area, in addition to looking at the value attributable to member borne costs and charges.

Trustees assessment of value relating to member borne charges and transaction costs

The member borne charges are limited to additional fund expenses (not the annual fund charges) and transaction costs for the main DC funds and the assessment found this compares very favourably to other DC schemes.

The Trustee’s investment advisers have confirmed that the additional expenses paid by members for the main DC funds are competitive for the types of fund available to members. Members pay significantly less than members in other schemes as they only pay the additional expenses element for the main DC funds.

The Trustee also considered the wider benefits members receive from the Scheme, which include:

• the oversight and governance of the Trustee, including ensuring the Scheme is compliant with relevant legislation, and holding regular meetings to monitor the Scheme and address any material issues that may impact members;
• the design of the default arrangements and how this reflects the interests of the membership as a whole;
• the range of investment options and strategies;
• the quality of communications delivered to members;
• the quality of support services such as the Scheme website where members can access fund information online; and
• the efficiency of administration processes and the extent to which the administrator met or exceeded its service level standards.

The following table sets out summary of how the Trustee has assessed value.

Area	Assessment	Commentary
Charges	Very Good	Most of the Scheme’s costs are covered by the sponsoring employer, with only transaction costs and additional expenses borne by the Member. Charges paid by members are therefore extremely competitive.
Scheme Administration	Good	The agreed service levels for achieving a task are generally shorter than the standard levels expected, and these are achieved in the majority of cases for DC members. The PSE / Trustee undertook an internal audit of Administration Activities, resulting in an overall rating of “Good” meaning that an effective control environment exists with all key controls confirmed as strong in design and operating effectively, and that there are no significant issues/exceptions that have not been highlighted by current oversight activities.
Scheme management and Governance	Very Good	The Trustee has a high level of knowledge and engagement in managing the Scheme, supported by a strong team in the PSE.
Communications	Very Good	A wide suite of communication tools and resources are offered to Scheme members which is continually reviewed. Member feedback is gathered and used to improve communications and help develop new services, eg guidance support at retirement.
At Retirement	Good	During the Scheme Year, wider At Retirement support was rolled out to members, and steps taken to encourage active and deferred members to think more clearly about the impact of updating Target Retirement Age on their investments.
Default arrangement	Very Good	Different defaults are available to different cohorts of members, recognising their different requirements. Performance of the growth phase of the defaults has been strong.
Self-select investment range	Very Good	The Scheme offers a good range of funds covering all the main asset classes with active and passive options and the option to invest in lifecycle strategies that target drawdown, annuity purchase or a cash lump sum (reflecting the three broad choices members have at retirement).
Scheme design	Very Good	Employer contributions are generous when compared to the market, with total contribution rates exceeding the industry benchmarks.

The above statement also refers to the current AVC arrangements. The Trustee assesses the legacy AVC arrangements on an annual basis to confirm whether it is in members’ interests to transfer them into the main AVC arrangement. At the last assessment, carried out on 23 May 2019, the Trustee confirmed that it is not in members’ interests for them to be transferred into an alternative arrangement as this would result in a loss of guarantees or high exit charges.

Overall, the Trustee believes that members of the Scheme are receiving good value for the charges and transaction costs that they incur as the assessment showed that members benefited from well-designed default investment strategies and range of investment options as well as very low charges, amongst other benefits as summarised above.