The Pensions Regulator (TPR) has issued a stern warning to UK pension funds to get to grips with preparations for their pensions dashboards, in order to meet their legal responsibilities, with the first deadline only a year away.
Large schemes (those with 1,000 or more members) are expected to start connecting to the digital architecture from April 2023, with a proposed connection deadline of end-June 2023 for the first cohort – including the largest master trusts.
Other types of large scheme will follow in stages, with a connection deadline for the final large scheme cohort set for end-September 2024, and later deadlines for medium-sized and small schemes.
Definitive deadlines will be published later this year.
But TPR research shows that 51% of defined contribution (DC) schemes and 33% of defined benefit (DB) schemes continue to hold at least some member records non-electronically, while just 4% of DC and 9% of DB schemes have begun to digitise the information they hold in preparation for pensions dashboards.
Furthermore, just 37% of DC and DB schemes have discussed pensions dashboards at their scheme’s trustee board meeting, and only a similar proportion have engaged with their administrator about their scheme’s data.
David Fairs, TPR’s director of regulatory policy, warned: “Trustees will have legal duties they must be ready for. We will take a dim view of trustees who carelessly fail to prioritise their dashboard responsibilities.”
TPR has launched an information campaign, including publishing “Pensions dashboards: initial guidance” which contains a summary of trustees’ legal duties, as well as a checklist to help manage progress.
TPR is also running a dashboard webinar on Thursday 28 July at 2.30pm
TPR said trustees should now:
- check their connection deadline;
- have pensions dashboards firmly on their board agendas;
- be deciding how they will connect: whether they will develop a solution in house, use a pensions administrator or an integrated service provider;
- take stock of, and digitise, their data.
Nigel Peaple, director of policy and advocacy for Pensions and Lifetime Savings Association, said: “There are plenty of actions trustees should be undertaking now. Know your dashboard staging window, make a plan, secure a budget and allocate resources. Discuss your connection options with your suppliers, and understand the accuracy of the personal data elements held on your scheme.”
Steve Webb, partner at LCP, said: “It’s pretty shocking that the majority of trustees haven’t had this issue on a board agenda yet. It should be on there now as a standing item until these new duties have been fulfilled.”
He added: “One risk is of a ‘capacity crunch’, as people wake up to all of this at the last minute, and find that the resources they need have all been taken up by those who got organised first. And smaller schemes may have fewer resources to devote to getting ‘dashboard-ready’.”
Webb highlighted the “mountain” there is to climb when a significant amount of pension data is not even in an electronic format, and therefore not ready to be supplied to a dashboard.
He pointed to one example, where DC providers send the member an up-to-date statement which they then store as a (mailmerged) PDF, rather than storing the actual value as a data field.
“As things stand, they will not have an off-the-shelf number ready to send back to the dashboard on demand,” he warned.