"Dashboards are coming, and it's time to take action," said David Fairs, Executive Director of Regulatory Policy, Analysis and Advice at The Pensions Regulator (TPR), speaking at this year's annual Pensions Administration Standards Association (PASA) conference.
The project is now "moving at pace", and next year will see the long-awaited pensions dashboard system make its way in from the horizon to your doorstep.
While we await the final detail as the Department for Work and Pensions (DWP) sifts through the many responses to the draft regulations published earlier this year, this summer is the time to sit down with the regulatory guidance and get your scheme's data dashboard ready.
Pensions dashboards - what are they?
The pensions dashboard initiative has been designed from the ground up to present savers with a secure all-in-one platform delivering at-a-glance all the pension information they could need with everything short of a bow wrapped on it.
Workers are increasingly mobile across their careers, moving from job to job and employer to employer, and it isn't uncommon to approach retirement with pension benefits accrued in multiple pension schemes. This can present a challenge when drawing up a solid financial plan for retirement.
The intent behind the dashboard system is that savers should be able to easily obtain complete and accurate information in respect of each benefit they're entitled to, and plan for their retirement with all the appropriate statistics available to them at the touch of a button.
What do I have to do to comply with the dashboard regulations?
Schemes should ensure their information is connected to the so-called dashboard ecosystem by the relevant staging deadline.
What information is required to be available to the dashboard user will vary depending on the scheme, but this is intended to encompass what the Pensions Dashboard Programme (PDP) has referred to as 'basic information' about the pension. This should include relevant information on the name and nature of the scheme, as well as the type of accrued pension benefits, and an estimate of the annual income that each saver might receive in retirement. What constitutes an acceptable basis for calculating this estimate will differ from scheme to scheme in accordance with the PDP data standards
There will be a time limit for processing a request and delivering the required information, which will also differ according to type of benefit, so schemes are well advised to ensure they know what they're going to need to present for an information request, and how long they'll have to turn this around.
When is the deadline for compliance?
Depending on the size and nature of the scheme, schemes may need
to have their data ready to be connected to the dashboard
architecture as early as June 2023.
Schemes should check their staging deadline which is set according
to the size of their scheme, and make sure they're in contact
with the Money and Pensions Service (MaPS) well ahead of time. The
onus is on the scheme to connect, and there is every indication TPR
is poised to ensure compliance with the new system.
What happens if I fail to comply with the dashboard regulations?
The penalty regime is laid out in the draft regulations published earlier this year. TPR's enforcement policies are due to be published for consultation later in the year.
Fairs stated in his address at the PASA conference that while the regulator would be supportive and pragmatic when dealing with failure to comply with the dashboard regulations, it would take stern action where it considered this was being done intentionally. The draft regulations published in February support this; they detailed a £5,000 maximum fine for an individual trustee failing to comply, and £50,000 for a corporate body, on a per breach basis.
How do I comply with the regulations?
TPR appears prepared to support trustees in this mammoth undertaking, but there will be heavy lifting for schemes involved, whatever assistance it can provide. Schemes are well advised to start including dashboards on their agendas, and get into gear well ahead of their deadline. TPR is currently aiming for a compromise position based on the push-pull between accuracy, complexity, and the administrative burden this places on schemes. While it may be satisfactory in the interim to provide simplified defined benefit projections or, in the case of a partial match between a saver and a scheme, to offer the opportunity for the saver to get in touch to clarify. The expectation appears to be that savers should be able to rely on the dashboard to make their decisions for retirement, and so an eventual push for complete accuracy appears likely.
The main task at hand is to make sure data is ready to be connected to the dashboard ecosystem. Data needs to be complete, accurate, and held in a way that can be easily accessed by the dashboard ecosystem. All information required for the dashboard should be digitised, searchable and, above all, accurate. Cooperation is key – as soon as the staging deadline has been identified, schemes should join with administrators in setting out an agenda for making that connection date.
There is still room for manoeuvre. The DWP's consultation response is due this summer. TPR is set to publish initial guidance early this summer as well, to be updated throughout the year. This is intended to be firmed up once the PDP has consulted on and confirmed its standards, which is also expected to take place in the same timeframe. PASA's Pensions Dashboards Working Group continues to work with MaPS as the dashboard is developed, and has published guidance throughout the process.
The requirement to connect is not far away. Schemes are well-advised to keep an eye on all this regulatory guidance as it appears, and spend the summer making sure their data is dashboard-ready.
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.
