Preparing for the Future – Pensions Dashboards

Published 7 April 2022

Back in February last year, the Pension Schemes Act 2021 introduced the framework for pension dashboards with the details to be set out in Regulations.

A pensions dashboard is a single digital view where every member of a pension scheme can see, in one place online, all of their pension savings (including their State pension). It is intended that the dashboard will include accrued and projected values of pensions.

The Department for Work and Pensions (“DWP”) is now consulting on the draft Regulations which cover the:

• requirements that trustees/managers of relevant occupational pension schemes need to meet;
• requirements pension dashboard services providers need to meet to be qualifying pensions dashboard services (“QPDS”) so as to be able to provide pensions dashboard services; and
• provision for the Pensions Regulator (“tPR”) to take enforcement action if the requirements are not met.

Who do the Regulations apply to?

The Regulations, which are to be passed when Parliamentary time allows, will apply to all registerable UK based occupational pension schemes (including public service pension schemes), with active and/or deferred members (known as relevant members). For now, pensioner members are not covered by the Regulations.

It is expected that there will be other dashboard-related consultations, for example by tPR and the Financial Conduct Authority (“FCA”).

How will pensions dashboards work in practice?

Essentially the intention is to put in place processes which will enable an individual to view all their pensions in one place in a way that is secure, accurate and easy to understand.

In practice, individuals will submit a request to find their pensions information to the Money and Pensions Service (“MaPS”) or a QPDS of their choice, and provide consent for their information to be used through the consent and authorisation service. An identity service will then confirm the individual’s identity. The MaPS, via the pension finder service (which will act as a switchboard), will then send requests to pension schemes. Pension schemes will undertake a matching process and, if there is a match or a possible match, register a Pensions Identifier (“PeI”). Once verified by the MaPS, the PeI will be returned to the individual’s dashboard. This stage involves “find data”, which is the data that trustees will receive to conduct matching.

Once the match is confirmed, an individual can request to view their pensions information. The individual’s dashboard will issue a view request to the relevant pension scheme and then the “view data” (i.e. the data to be returned to dashboards) will be returned directly from the pension scheme to the individual’s dashboard, where the data will be displayed in accordance with the relevant standards issued by MaPS. An individual can choose to share view data with an adviser.

It is clear that the process will involve various interactions between different parties. While it is for each party to determine their own data protection obligations, in the DWP’s view, the MaPS, any QPDS, the DWP itself and each pension scheme will be acting an independent data controller when processing any individual’s personal data. It is expected that there will be a separate UK GDPR publication in the summer but it is clear that there will be a lot of personal data available on any pensions dashboard so care will need to be taken by all parties involved in delivering pensions dashboards.

In addition to data protection considerations, trustees of relevant schemes and QPDSs need to be aware of the requirements set out in the draft Regulations that they need to meet in order to deliver pensions dashboards.

What do schemes have to do?

Trustees of relevant schemes will need to:

• register with the MaPS and connect to the digital architecture so they can receive find and view requests by their staging deadline. Trustees will have to co-operate with, and report certain information to, the MaPS in the exercise of its functions in relation to pensions dashboards. For example, if trustees expect to have scheduled downtime or experience system issues, disconnection or cyber-attacks, these must be notified to the MaPS;
• receive find requests, acknowledge any find request and complete matching to identify whether there is a match;
• if there is a match, register any found pensions;
• receive and respond to view requests to make information available to the individual’s selected dashboard; and
• keep records of management information, including the number of find and view requests received (and response times). This information must be kept for six years and provided to the MaPS, tPR and FCA on request.

Data to be returned to dashboards by schemes (i.e. view data) where a match has been identified and the member has consented to their view data being provided includes:

• administrative data: For example, scheme and employment information. Administrative data will generally need to be provided immediately following receipt of a request (and within 3 months of joining a scheme to new members);
• signpost data: The key information is a website address where individuals can access certain information such as the scheme’s statement of investment principles and implementation statement. Signpost data will need to be provided immediately following receipt of a request; and
• value data: This includes accrued pension values and projected pension values, although projected information is not required in respect of money purchase benefits if a member is within two years of their normal pension age.
  
  It is expected that, for the majority of relevant schemes, this information can be collated from benefit statements issued or calculations performed within the last 12 months. If this data is not available, trustees will have 3 working days to supply the information (or 10 working days if there are any defined benefits).
  
  For State pensions, the current amount and forecast amount will be displayed.

Qualifying pensions dashboard services

Pensions dashboard services providers will need to be QPDSs to be able to provide pensions dashboards. To be a QPDS, they would need to:

• connect to the specified digital architecture;
• conform with the MaPS standards and tPR standards with respect to reporting. It is anticipated that there will be standards covering data (content and formatting), connection (connectivity mechanisms and sharing of information protocols), design and reporting. The standards are expected to be consulted on by MaPS or tPR; and
• be authorised by the FCA. If MaPS notifies the FCA that a QPDS no longer meets the criteria of being a QPDS, the FCA can de-authorise the provider.

When do schemes have to connect to the digital architecture?

The intention is to prioritise schemes by their size and so different schemes are required to connect at different stages (see below).

Trustees will generally be expected to connect during the month before their relevant scheme’s staging deadline although for master trusts with 20,000 or more relevant members, this will be in the 3 months before 30 June 2023. Regardless of the deadline timetable, schemes which are required to connect can apply for a deferral in limited circumstances and schemes which are not yet required to connect, can chose to connect earlier than their staging deadline provided they obtain permission from the MaPS.

Non-compliance

If trustees of relevant schemes do not comply with the requirements in the Regulations, tPR will be able to, at its discretion, issue:

• compliance notices to trustees and/or third parties to take or not take certain actions; and
• financial penalties (which can be up to £5,000 for individuals and £50,000 otherwise).

Comment

The concept of pensions dashboards is generally well-received by the pensions industry as it seeks to engage members more in pensions by increasing understanding of their pension benefits and put members in control of their retirement plans. However, the proposed obligations, data requirements and timetabling means that pensions dashboards remain an ambitious plan. The response to the consultation on the draft Regulations will no doubt be eagerly awaited by individuals and the pensions industry alike.