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People Get Ready – How To Prepare For Pensions Dashboards Hero

How To Prepare For Pensions Dashboards

Tuesday, 15 February 2022

Last week the Department for Work and Pensions (DWP) published their final consultation on pensions dashboards regulations, along with templates on the data that schemes will need to provide. Understandably the timeframes are tight, but they need to be if the first live dashboard is launched in Spring of next year as planned.

The consultation confirmed that it will be a legislative duty for schemes to provide dashboards with retirement data, which is a massive boost for the programme. This will ensure the entire population will have access to the dashboard, and the information presented should help more people plan for their retirement more effectively, which is ultimately one of the critical objectives of the whole initiative. In addition, having all the UK pensions on a dashboard will allow people to reconnect with lost pensions, and in future, will enable them to track pension entitlements as they move through their working life.

There is a lot of detail in the regulations. This is to be commended as it proves the government commitment and resolve to get dashboards launched. But it is also clear that pension data providers have much to consider in preparing to support the dashboard.

In this article we identify some of the key themes from the consultation document, as well as sharing some areas of uncertainty and highlight what schemes need to do now to prepare.

Data Rights And Dashboard Features

The consultation once again highlights the importance sourcing of the right data and balancing that with providing access to the data for the right people (or their delegates). There are additional protections in place to ensure individuals' data is not shared inappropriately. Providers initially do not need to manipulate the data for purposes beyond the initial aims of pensions dashboards, such as retirement modelling or allowing transfers through the dashboard. This should help the public both engage with and build trust in dashboards. Additional features can be added when there is public demand for them.

Uncertain Rules

There are still areas of uncertainty in the regulations as they are currently drafted. Although this is expected given the nature and pace of change in the pensions industry. Especially around the new standards for statutory money purchase illustrations and the launch of collectively defined contributions, of which the rules are still being finalised.

There is a duality in the regulations, with suggestions on simplifying pension calculations, but then asking that public sector schemes provide details on the McCloud Age Discrimination changes. It would be simpler and more in line with the regulations to point the individual to the scheme website to learn more about their options under such a complex area as McCloud.

What's Not Covered?

One area where the regulations are quiet is for schemes in a buyout or PPF assessment. Who is responsible for satisfying those data requests? If a scheme is in PPF assessment, then what benefits should be provided? Further regulations may be needed to resolve issues like this in the near future. Given that a similar problem has been resolved for AVC's, it may be feasible to adopt a similar approach for these schemes – at least until the buyout/assessment is completed, with the trustees still responsible for any pensions dashboards duties.

Planning For Implementation

The timetable as drafted can make it difficult for schemes to plan when to get ready for dashboards. Employers need to be aware that moving to a new master trust in this period could be challenging, especially where it would change the new master trusts position in the timetable.

What is clear though is that the timetable does highlight the need for schemes to get ready. There will be a lot of work to ensure that pension data is clean enough to match with the right individual or that partial matches can be returned at a minimum. Whilst this is an overhead, data cleansing will have already been done for the GMP Reconciliation and GMP equalisation exercises, which many schemes are required to submit reports to the Pension Regulator on their data. There may also be a lot of potentially good news stories about matching people to lost pots, which can only help improve the reputation of the industry.

One other point to bear in mind is that the dashboards give limited time for schemes to provide the individual member with their pension figures, even if these are only rough estimates. Defined benefit schemes only have ten working days to offer revalued pension amounts for deferred members[i] (and active members and members in money purchase schemes values should be returned within three days). This could mean that schemes and providers will have to revive old calculations for deferred members or potentially automate new ones where these were not previously available.

Equiniti is in the process of finalising our plans for getting dashboards-ready. With the launch of these regulations, the rest of the industry is on notice that they need to get ready too. If you would like to speak to us about how you can start preparing, get in touch below. 

[i] Unless the member left in the last 12 months, in which case the value at the date of leaving should be returned immediately.