With the largest pension schemes being expected to have connected to the new dashboard system by 30 June 2023, trustees should promptly establish the date by which their scheme will have to be connected to the dashboard system and should start liaising with their administrators to understand the quality of their relevant data and what systems are in place to share information with the dashboard.

Background

The DWP has launched a consultation on pensions dashboards and has, at the same time, published "indicative" draft regulations, the Pensions Dashboards Regulations 2022.  The FCA is also consulting on new rules governing how FCA-regulated pension providers would provide and facilitate the provision of information about personal and stakeholder pensions to pensions dashboards.  To enable proper consultation, the Pensions Dashboards Programme, which is the group within MaPS leading on pension dashboard operations, has also updated its draft Data standards usage guide (which is the document that sets out the data elements that will drive pensions dashboards).  The DWP consultation runs until 13 March and the FCA consultation closes on 8 April.

By way of background, the Pension Schemes Act 2021 brought in provisions relating to pensions dashboards and enabled the Government to make regulations requiring relevant occupational pension schemes to make pensions data available to individual members via qualifying pensions dashboards services.  At the same time, the FCA was required to make corresponding rules in respect of personal and stakeholder pension schemes.  The FCA will also authorise and regulate the operators of "qualifying pensions dashboard services" (QPDS), i.e., other dashboard operators in addition to the dashboard that will be hosted by MaPS. 

The Government has stated that its vision, as shared by other key partners such as the Pensions Regulator and the FCA, is for pensions dashboards to "enable individuals to access their pensions information online, securely, and all in one place, thereby supporting better planning for retirement and growing financial wellbeing". 

What are the new requirements for trustees? 

Very broadly, the Regulations require trustees do several things, including, register with and connect to MaPS in compliance with relevant standards within a prescribed period (usually 3 months before their staging profile date) and then comply, on an ongoing basis, with extensive requirements to provide the relevant pensions dashboard with members' pensions information.

In relation to the provision of information, the proposed model involves schemes receiving "find" requests, initiated by a member, which then requires schemes to check their records to see if they can identify a "match" with the personal data supplied by the member (e.g. name, address, date of birth, email address and NI number). Matching criteria has to be set by the pension scheme, although the Pensions Administration Standards Association (PASA) has published industry guidance on Data Matching Conventions and the DWP suggests in its consultation that schemes may wish to use this guidance. 

If trustees make a positive member match, the trustees need to check the individual's relevant permissions sent by the separate MaPS-operated Consent and Authorisation Service and can then provide the "view data" to the relevant dashboard.  This is the collective term for "administrative data", "signpost data" and "value data", all as detailed in the draft legislation and consultation.

"Administrative data" (e.g., scheme name, benefit type, membership status, NRD) and "signpost data" (a website address where individuals can access information on costs and charges and the scheme's Statement of Investment Principles and implementation statement) must be provided immediately.  "Value data", which is the collective term used to describe members' accrued and projected pension values and is described in detail in both the Regulations and the consultation, must be provided immediately if the value has been generated for a benefit statement within the last 12 months or within 3 working days where that value has not been calculated or provided within the last 12 months.  However, for defined benefit and hybrid benefits, schemes will have 10 days to provide this information.  The Government is keen for these proposed timings to be reduced in time, in particular for money purchase benefits, where the Government intends to move towards instantaneous responses.

When will different schemes become subject to the new requirements?

The Regulations contain a "staging profile", which creates the order in which relevant occupational pension schemes are required to establish a connection with MaPS and then become subject to the relevant dashboard's information requirements.  The Regulations set out the criteria for schemes to qualify as either a "large scheme" or a "medium scheme". "Large schemes" include master trusts within 20,000 or more relevant members (which excludes pensioner members) and money purchase schemes used for auto enrolment with 20,000 or more members but also includes smaller schemes, with later staging dates as the size of scheme reduces.  "Medium schemes" are occupational pension schemes with more than 100 members.  Staging dates for small and micro schemes will be determined at a later date and are not covered by the Regulations.

Master trusts with more than 20,000 members will have a staging deadline of 30 June 2023 and money purchase auto enrolment schemes with more than 20,000 members will have a staging date of 31 July 2023.  Money purchase schemes with fewer than 20,000 relevant members have later staging dates and non-money purchase schemes with more than 20,000 members then have a staging date of 30 November 2023.  The latest "large scheme" staging date is 30 September 2024.  The full list of staging dates can be found in Schedule 2 to the Regulations, which can be viewed here.

Note that hybrid schemes, which provide both money purchase and non-money purchase benefits, will having staging duties applying to both their money purchase and non-money purchase sections at the same time.  The relevant staging date will be whichever is the earlier connection deadline (i.e. trustees need to count their relevant money purchase members and check the deadline for a scheme of that size and then do the same for their non-money purchase members and the earlier date will be their staging date).  The Regulations clarify that a scheme with only Additional Voluntary Contributions (AVCs) will not be classified as a hybrid scheme for this purpose. 

What else do the Regulations cover? 

The Regulations also include provisions setting out the requirements to be met for a pensions dashboards service to be a QPDS and provisions to ensure their compliance with the requirements.  Whilst MaPS is required by legislation to develop and host its own dashboard, other operators may wish to connect their own dashboards to the new model, and so would need to become a QPDS.  The Pensions Regulator has powers to issue fines for non-compliance with the new requirements.

Key takeaways and action points

The new obligations on trustees to connect and provide data to the pensions dashboards are significant and are likely to take some planning and investment. Given that the largest schemes will be required to connect to the dashboards as early as next Summer, trustees should promptly establish their staging date and then liaise with their administrators and advisers to check that their data and systems are fit for the purpose of sharing information with pensions dashboards.  Whilst the Government recognises in its consultation that there are likely to be additional challenges for non-money purchase schemes to connect to dashboards, e.g. the need to equalise GMP and the general lack of digitisation in many defined benefit pension schemes, the Government appears committed to implementing dashboards within the anticipated short timescales and is not willing to provide additional time for these schemes to meet the relevant requirements.