The Department for Work and Pensions has launched a consultation on draft regulations relating to the implementation of pension dashboards. Trustees should check when their scheme is likely to be required to connect to the dashboards and develop a plan to ensure their scheme is ‘dashboard ready'.
The draft regulations set out the duties that will apply to trustees to connect their scheme to the dashboards and to provide pension information on request whenever a ‘match' is found. The consultation also outlines the information and data schemes will be required to provide to the dashboards.
The regulations will also place duties on dashboard providers, including in relation to how pension data is used and presented, and they will introduce an enforcement regime to ensure trustee's comply with their legal obligations.
What are pension dashboards?
Individuals will be able to use pension dashboards to access information about their pensions online, securely and in one place. It is hoped this will help improve awareness and understanding about pensions, reconnect people with lost pension pots and transform how individuals think and plan for their retirement.
The Money and Pension Service (MaPS) will develop and host its own pension dashboard, situated within a newly developed retirement planning hub on the Money Helper website. Other organisations will also be able to develop and host their own dashboards, creating scope for innovation and engagement among a broad range of dashboard providers.
Dashboard ecosystem
To make dashboards work, multiple parties and technical services will need to be connected – in what the Pension Dashboard Programme (PDP) refers to as an “ecosystem”. The dashboards ecosystem will encompass
- the dashboards themselves,
- data providers, including pension schemes and pension providers, and
- the central digital architecture
The PDP is responsible for creating the digital architecture and services, which will enable data providers and dashboard operators to connect.
Trustees will be required by law to connect their scheme's data to the dashboard ecosystem and to maintain a functioning connection. On an ongoing basis, schemes will be required to provide pensions information whenever a match is made with a relevant individual using a dashboard.
Dashboard data
Where a match is made, trustees will be required to return information to the relevant dashboard about:
- their scheme, and
- an individual's accrued and projected pension rights.
The data schemes will be required to return will vary depending on the type of scheme and the nature of the benefits. Trustees will be responsible for ensuring this data is accurate and provided in a timely manner.
Individuals will also need to be signposted (where appropriate) to where they can find information on member-borne costs and charges and a scheme's statement of investment principles and implementation statement.
Data will only need to be provided to active and deferred members, with pensioners being excluded from the initial roll-out of the dashboards.
Trustees will be able to delegate the task of providing data to the dashboards to a third party, such as their scheme administrator. However, trustees will retain ultimate responsibility for ensuring that the data is accurate and that it is returned correctly and not misused.
Implementation timeline
Given the number of schemes that will need to connect to the dashboard ecosystem, the DWP is proposing a staged approach to implementation. As such, the implementing regulations will set a deadline by which schemes will be required to connect to the dashboard ecosystem and be in a position to provide pensions data on request. The deadline for connecting will vary depending on the type and size of scheme.
In line with this, it is proposed that there will be a three wave approach to staging, which will see:
- large schemes with 1,000 or more relevant members connect between the end of November 2023 and September 2024
- medium schemes with 100 to 999 relevant members connect between October 2024 and the end of October 2025, and
- small and micro schemes connect from 2026.
Wave 1 will begin with master trusts and providers of personal pensions being connected, followed by money purchase schemes used for automatic enrolment and then by non-money purchase schemes, public sector schemes and any remaining money purchase schemes. This sequencing is designed, in part, to give defined benefit schemes, public sector schemes and other non-money purchase schemes longer to prepare their data for the dashboards.
Given that pensioner members will be out of scope when the dashboards are initially launched, a scheme's size will be based on the number of active and deferred members (including those with pension credits) within the scheme as at the scheme year end between 1 April 2020 and 31 March 2021.
Enforcement
The Pensions Regulator will be responsible for ensuring trustees comply with their dashboard duties and it will be given new powers to enable it to do this. This will include the power to fine trustees and service providers who fail to comply and to issue financial penalties in respect of each request for information in relation to which a failure has occurred.
The Information Commissioner's Office will be responsible for investigating any breaches of data protection law that occur and taking appropriate enforcement action.
Immediate actions
In light of the DWP's latest consultation on the dashboards we recommend trustees:
- determine when their scheme's dashboard staging date is likely to be
- discuss with their scheme's administrator what will be involved in ensuring their scheme is ‘dashboard ready', and
- develop a plan with their scheme's administrator for ensuring that their scheme will be ready to connect to the dashboards by the relevant deadline.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.