Pension dashboards: are you ready to connect
Pension dashboards are needed more than ever. The Pensions Dashboards Programme (PDP) has now published its 6th progress update report, covering progress since April 2022.
It has completed the build and is now testing the central digital architecture and developing technical and operational standards that will enable pension providers and schemes to meet their connection duties.
Over the coming months, providers and schemes will begin connecting to the dashboards and user-testing the live environment. This will be a major undertaking for many pension schemes.
While there are different staging dates for schemes depending on their size, there will be major challenges around data management, technology readiness, additional costs and resources needed.
There has been a consultation on the draft standards that set out the legal requirements for pension providers, schemes and dashboard providers.
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FCA publishes final rules
The Financial Conduct Authority (FCA) has now published the final rules on pensions dashboards for FCA regulated pension providers to complete connection of their personal and stakeholder pension schemes to the Money and Pensions Services digital architecture by 31 August 2023.
Final guidance will follow from the regulators of trust based schemes. Dashboards are definitely key for the 2023 business plan for each scheme.
Alongside this, the Department of Work and Pensions published a new draft guidance on deferred connection and announced that schemes will be alerted to the dashboards availability point (when pensions dashboards will be available to the public) six months in advance, rather than 90 days.
When will different schemes need to connect?
Staging dates for connecting to the dashboards are based on the size of the schemes. Large schemes such as master trusts will be the first of three staging cohorts for the dashboards, connecting to the necessary digital architecture between April 2023 and September 2024.
They will be followed by medium schemes throughout October 2024 to October 2025, with small and micro schemes expected to connect from 2026, although these are not currently included in the legislation compelling schemes to connect.
From 2023, on their staging date all pension schemes and providers must comply with new legislative duties for pensions dashboards. As part of this, schemes and providers need to soon decide how they want to digitally compare and match ‘find requests’ from users of dashboards against all the records they hold. For more guidance on data matching, read this useful guide from PASA.
A considerable amount of work is being carried out by major scheme administrators and ISPs to deliver these solutions in the background. The approach to passing on costs to clients vary too. They are all at different stages of setting up testing and this will come into focus as staging dates approach.
Key steps to take now
1. Know when your staging deadline is
It is essential you know your scheme’s staging deadline, understand the timelines and create a plan to be ready.
Scheme administrators play a key role in this work and pension trustees should seek assurance their provider has a clear understanding and plan to develop the digital framework.
3. Develop a data plan
Identify key actions for your pension scheme’s compliance with pensions dashboards. The Pensions Regulator’s new single code of practice asks schemes to set up and maintain a data action plan - it makes sense to integrate pension dashboards requirements into this and start now to phase the work in. You also need to add a data review and pensions dashboards into your main trustee business plan.
4. Personal data accuracy and matching
Employees need to be able to find their schemes once the dashboards are live. Working out a matching policy early and knowing what member data you will use is crucial. Pension trustees may need to take professional advice on developing a policy.
Five key questions pension schemes and employers need to ask themselves now:
- Have we decided how to connect our scheme?
- Do we have data that needs digitising?
- Do we have the quality of data we need to provide matching data?
- Do we have any gaps in our data that need filling?
- Do we have the availability of all required pension amounts for display on dashboards?
While not an exhaustive list, later in the project pension schemes and employers will need to consider:
- Employee support pre and post ‘go live’
- Data protection compliance
- AVC providers
- Administrative impact and contractual arrangements
In partnership with Punter Southall Governance Services (PSGS)
PSGS are trusteeship and pension governance experts.