This week a final version of the Pensions Dashboards regulations – which will enable millions of UK savers to access their pensions information in one online platform – has been laid before parliament.
Marking another important milestone in the Department for Work and Pensions’ (DWP) progress towards making Pensions Dashboards a reality, the regulations outline how pension schemes will connect to the dashboard ecosystem and what providers must do to become a qualified pensions dashboard service.
The regulations first appeared in draft form in January 2022 for consultation, with the government responding to that consultation in July 2022. However, it is only now that the regulations have been finalised.
The regulations cover three areas:
- Requirements of those occupational pension schemes within scope in relation to cooperating with and connecting to the dashboards ecosystem and the information they must provide to individuals via it;
- Provisions for The Pensions Regulator to take enforcement action in relation to pension schemes that do not comply;
- Requirements to be met by other providers of pensions dashboards services in order to be “qualifying pensions dashboards services”.
The Pensions Dashboard Regulations 2022 will apply to all registrable UK-based occupational pension schemes – other than stakeholder schemes – including public service pension schemes in relation to their active and deferred members.
However, for schemes with less than 100 such members, they only apply where they are permitted to connect on a voluntary basis. There are also easements for schemes in Pension Protection Fund (PPF) assessment or those that are winding up.
Pensions Dashboards will transform how savers access their pensions facts and figures, allowing people to see what they have in their various pensions – including their state pension – in a single place online, at any time they choose, according to the DWP.
Alex Burghart, minister for pensions and growth, said: “We want people across the UK to have the support and information they need to make informed choices about their financial futures.”
He added that “providing a convenient place for savers to access their pension information – at the touch of a button – will help people become better informed and more engaged savers, and support them to plan more effectively for retirement”.
Chris Curry, principal of the Pensions Dashboards Programme, said: “Pensions Dashboards will make a real difference to how people view their pensions savings, and how pension providers and schemes engage with their members and customers. There are now just over six months until the first window opens for pension providers and schemes to begin mandatory connection to the dashboards ecosystem. Dashboards will soon become a reality, and government, the regulators and industry will work together to make them a success.”
Taking onboard feedback from industry, the DWP also announced that the Dashboard Availability Point (DAP) will be announced six months in advance, giving time for the industry to make final preparations for the public launch of the service.
The building and initial testing of the digital dashboards architecture is already well underway, with pension schemes being urged to ensure they are “data ready” for the launch of Pensions Dashboards.
The regulations have been presented to parliament in draft form, which means that both Houses will need to approve their contents before they pass into law.
Connecting to the dashboard
Schemes will be required to connect to the dashboard in a staged manner with the largest schemes going first. The regulations set out two staging cohorts – large schemes (1,000+ members: 31 August 2023 – 30 September 2024), then medium schemes (100 to 999 members: 31 October 2024 – 31 October 2025). Small and micro schemes are expected to have to connect from 2026, but fresh regulations will be required to achieve this.
The Money & Pensions Service (MaPS) will give every scheme a window for connecting and once connected, a scheme should be able to respond to ‘find and view’ requests from members wishing to access their pensions information..
All public sector schemes are required to connect by 30 September 2024, but they may not need to supply value data until 1 April 2025.
The definition of a member for connection purposes excludes pensioners and therefore schemes with large pensioner but small active/deferred populations may find they have more time before they are staged.
Consultancy LCP believes these connection dates remain ambitious given the complications faced by public sector schemes, and that private sector schemes need to be fully up and running with their dashboard responsibilities before they can connect.
“It is clear from the regulations and guidance that deferral will only be entertained in the narrowest of circumstances. Trustees also need to realise that the window for deferral is linked to when the regulations come into force – not to their own connection date,” the firm said.
The Pensions Regulator is given extensive powers to ensure that trustees and third parties comply with the regulations.
These include the ability to issue compliance notices to either party for any instance of non-compliance, and penalty notices of up to £5,000 to individuals and up to £50,000 in other cases for any instance of non-compliance.
The Regulator will also have the ability to issue compliance and penalty notices in respect of individual contraventions of the regulations. All such enforcement action is to be at the Regulator’s discretion.