The UK government’s response to the Draft Pensions Dashboards Regulations 2022 has called for various members of the pensions industry to voice concerns over the complexities of data collection and maintenance.
Pensions minister Guy Opperman yesterday said that trustees or managers of pension schemes of “all types and sizes” should focus their preparations on “making sure their data is ready and they have plans in place for how they intend to connect to the digital architecture”.
He added: “Pensions dashboard services will change the way people engage with and prepare for retirement forever. By enabling people to see all their pensions information in one place online, including on their State Pension, individuals will be able to make better-informed decisions about their retirement, as well as find lost and forgotten pots.”
Aiden Coloe, partner at LCP, said: “The consultation makes it clear that it’s the industry that will have to do the heavy lifting on dashboards and contains no material changes to the amount of work that will have to go into preparing for their implementation. We know that data is a thorny issue across the industry but it’s something that will have to be focused on by schemes in order to get dashboards up and running effectively.”
Coloe also said that the government still intends to allow data to be exported from dashboards to a less controlled and regulated space.
“We still have concerns about the impact of this on consumer protection and hope the FCA [Financial Conduct Authority] will ensure that this risk is mitigated against.”
Paul McGlone, the Society of Pension Professional’s dashboard lead, added that the consultation recognises that many of the complexities that schemes have to deal with cannot be legislated for in detail and need discretion to be applied, either by trustee or by The Pensions Regulator.
“The proof will be how that works with real data and members, both in early testing and then as dashboards go live,” he said.
Consideration of social risks and opportunities by occupational pension schemes
The DWP today announced the establishment of a new taskforce to improve data, as it also released a response to another consultation.
Consideration of social risks and opportunities by occupational pension schemes addresses how effective pension scheme trustees’ current policies and practices are in relation to social factors.
In March 2021, the DWP launched a call for evidence – the first of its kind – seeking views on how schemes approach social risks and opportunities. One of the main reported approaches to managing social factors was active ownership, which includes engagement with companies and others in the investment chain as part of a wider stewardship strategy.
To ensure focus of social factors continues to grow – and is taken as seriously as financially material environmental factors, including climate change – the DWP has proposed to set up a taskforce on social factors (TSF).
This will be a minister-led, cross-department working group, with invitations extended to financial regulators, DWP stated.
Opperman, who will lead the taskforce, said: “Financially material social factors also pose risks and provide opportunities to schemes’ investments, and our taskforce will help ensure that focus on social factors continues to grow among pension schemes and throughout the investment chain.”
The group would lead work to identify reliable data sources and other resources, which could be used by pension schemes to identify, assess and manage financially material social risks and opportunities – and that could be used to inform guidance on investment risks from social factors.
The DWP also said that the taskforce would monitor and report on developments with the International Sustainability Standards Board, and other international standards.
“The action that DWP has decided to take – setting up a taskforce on social factors to improve the data available to trustees and monitoring international reporting developments – seeks to address one of the main barriers trustees face to more effective consideration of social factors. We support DWP’s focus on active ownership and its encouragement for trustees to recognise the linkages between different ESG factors,” said Claire Jones, head of responsible investment at LCP.