The Department for Work and Pensions (DWP) has launched a consultation on the draft regulations for the introduction of pensions dashboards.

The regulations will make provision for the requirements that will need to be met by pensions dashboards and their providers, and the trustees and managers of relevant occupational pension schemes.

The consultation is split into ‘chapters’: overview, data, find and view, connection, staging, compliance and enforcement, and qualifying pensions dashboards services.

It proposed placing “ambitious” data requirements on pension trustees and managers, including the requirement for trustees and managers to check with the Money and Pension Service (Maps) that the individual has given consent to their ‘view’ data being provided to their dashboard.

Individuals will need to provide personal data (find data), which will allow trustees or managers to search their records for a match, and, if successful, trustees will subsequently return scheme data for that individual (view data).

The DWP has proposed that the dashboards should be ‘find and view’, whereby individuals will be able to find what pensions they have and information on them, from the outset.

Large pension schemes will need to provide data to dashboards between April 2023 and September 2024, medium-sized schemes between October 2024 and October 2025, and small and micro schemes in 2026.

Public service pension schemes will be required to connect by the end of April 2024.

The DWP stated that by delivering staging with this timeline will mean that dashboards will be able to potentially find 99 per cent of all active and deferred pension memberships by the end of September 2024.

State pension information will only be able to be provided by the DWP on dashboards and will be available at launch.

Schemes will be required to complete matching to identify whether information held in the ‘find’ request matches with the individual’s pension and return a pension identifier.

They will also need to comply with standards to meet their legislative duties.

For defined contribution (DC) schemes, trustees or managers would be required to provide individuals with the value of their accrued benefits, which may be a value generated for a benefit statement within the last 12 months or a calculation performed within the last 12 months.

They will also need to provide individuals with the value expressed as an annualised income based on the same date.

The DWP has also proposed that DC trustees and managers provide individuals with an illustration of what their pension might be worth in retirement, as an income and as a projected pot value, although there are exemptions to the projected value illustration outlined in the consultation.

Trustees and managers of non-DC pensions will be required to provide active scheme members with the amount of pension that would be payable if pensionable service were to have ended at the illustration date, presented as if the saver reached normal pension age.

Again, this must be provided from a statement or calculation from the last 12 months.

For deferred members, the DWP proposed that trustees or managers provide members with a value that has been revalued to the illustration date.

Non-DC trustees and managers will also be required to provide active members with an illustration of their pension in retirement, and the projected value would be required from the point at which they connect to the digital architecture.

Collective DC (CDC) schemes will be required to provide their active members with an annualised accrued value, as well as a projected value, while deferred members would be provided with an accrued value.

Pension schemes will need to return value data that has already been generated immediately, while value data that has not been calculated will need to be returned within three days, except for non-DC schemes and schemes that offer benefits where the benefit value is calculated with reference to both DC and non-DC formulas, which will have 10 days.

The DWP also sought views on whether 30 days was an appropriate amount of time for individuals to respond to their pension scheme with the necessary additional information to match their pension.

Administrative data required will include information on the pension scheme, information of the scheme’s administrator and employment details.

Schemes will also be required to provide signpost data, where applicable, by way of a website address where individuals can see member-borne costs and charges, statement of investment principles and the implementation statement.

Under the consultation proposals, dashboards providers will need to connect to the specified digital architecture, be authorised by the Financial Conduct Authority (FCA) and comply with the standards.

The DWP noted that it did not believe it would be an appropriate use of parliamentary time for parliament to be considering regular changes to standards, so it has proposed an approval process that requires Secretary of State approval of standards.

Maps will be required to set standards covering the legislative requirements, including data standards, technical standards including connectivity, design standards, and reporting standards.

Providers that fail to meet these standards will not be able to operate, while Maps will monitor those operating and if it detects non-compliance, providers will be deregistered from the Governance Register and automatically disconnected from the digital architecture.

“This current consultation on draft regulations provides a further opportunity for both industry and individuals to continue to influence that process,” said Pensions Minister, Guy Opperman.

“We acknowledge that our proposals are ambitious and that making a success of pensions dashboards is a significant task for both government and industry. But dashboards are an essential part of our plans to modernise the pensions industry and make it fit for the 21st century digital age.

“Dashboards will open huge opportunities to reunite individuals with lost pots and transform the way people think about and plan for their retirement.

“The draft regulations, that we have published with this consultation, would ensure the connection of pension schemes is managed in a way that we believe is feasible.

“By prioritising the connection of the largest pension schemes first, we can ensure that dashboards serve the greatest number of people as soon as possible. We have also been mindful that initially some schemes may need time to turnaround certain information on the value of pensions for the purposes of dashboards, nevertheless, it is our intention that this will all become instantaneous in the future.”

Pensions Dashboards Programme principal, Chris Curry, added: “Dashboards will completely change the retirement savings landscape, giving people more opportunities to engage with their pensions than ever before. This improved future for savers can only be delivered by government, regulators and the pensions industry working together.

“This consultation is a huge step forward, providing greater clarity for industry on the steps they will need to take to deliver dashboards.

“But beyond engaging with this consultation there are already many actions that pension schemes can take to progress their dashboards journey.

“Reviewing and preparing their data, considering the use of an ISP to connect to the dashboards ecosystem and organisational preparation, including ensuring they have the right team in place to deliver this work, can all be done now.”

This article first appeared on our sister title, Pensions Age.

Share Story: