Govt proposes ‘find and view’ dashboards amid public sector delay

The draft regulations governing the pensions dashboards, published on January 31 by the Department for Work and Pensions, set out in detail the data requirements of dashboards integration, the ‘find and view’ functionality, the onboarding process and timescale for schemes of different sizes, and the powers given to the Pensions Regulator to enforce compliance.

In his foreword to the consultation, pensions minister Guy Opperman said: “Pensions dashboards will revolutionise the way people interact with their pensions. They will make accessing pensions information easier by allowing people to see what they have in their various pensions at the touch of their smartphone, laptop or computer.”

He acknowledged that the proposals were “ambitious” and represented a “significant challenge” for the government and the pensions industry. 

Large schemes and providers will have been planning for the introduction of dashboards for a while now so, although there might be some teething problems for some in connecting to the ecosystem, there is unlikely to be wilful non-compliance

Darren Philp, Smart Pension

“Government is playing its part in ensuring dashboards provide a comprehensive view of what a person may receive in retirement, as information on state pensions will be included on dashboards from day one,” Opperman continued. 

“We are confident that these proposals will be widely supported by individuals that have pension savings, by the pensions industry, and by people across the political spectrum. They deliver on our commitment to facilitate the introduction of pensions dashboards and have the potential to transform retirement planning forever.”

DWP opts for ‘find and view’ despite criticisms 

The consultation set out the government’s expectation that the dashboard will include both find and view functionality from the moment it is launched, allowing members not only to see their pension entitlements but also the value of those entitlements.

Industry figures had previously listed their concerns that the challenge of providing ‘find and view’ functionality from day one would be difficult to meet, with some calling for a rethink of the proposals.

The DWP acknowledged the difficulty posed by ‘find and view’, but said it was still the preferred approach.

It added that there remains the chance that the dashboards will present incomplete data at launch. It said that although individuals “may have a low tolerance for an incomplete dashboards at the onset”, this could be mitigated if the gaps, such as schemes not yet staged, “are clearly identified and it is made clear when these gaps would be filled”.

Richard Smith, member of the Pensions Administration Standards Association’s dashboards working group, said: “Dashboards pose two major, but completely separate, data challenges for schemes: being able to find pensions (because personal data is accurate and matches), and being able to return the required information about found pensions (ie, the prescribed administrative, signpost and value data).

“We’ll hopefully get some good insight from beta testing due to be carried out this autumn, crucially with real schemes’ personal data, and just how much of an ask challenge one will be for the industry, including the scale and complexity of resolving ‘maybe matches’.

“Schemes can be making headway with [the second challenge] right now, but whether challenges one and two together are realistically feasible, across the whole of the industry, probably won’t be clear until much later in 2022 or, more likely, some time into 2023.”

Darren Philp, director of policy and communication at Smart Pension, told Pensions Expert: “Pensions admin and member engagement needs to be brought into the 21st century and while it can be argued, certainly from a delivery perspective, of just going for find first, schemes and providers need to modernise their technology and give members and customers the information they need to help them plan for their retirement.

“A find-only service at this stage would be somewhat underwhelming and the government is right to be ambitious.”

Public sector delays

According to the government’s timetable for staging, schemes will come onboard in three waves. 

Large schemes, with more than 1,000 members, will be introduced between April 2023 and September 2024, before medium schemes (100-999 members) will join between October 2024 and October 2025. Small and micro schemes (with under 99 members) do not have a specific date set, although the consultation stated it is likely to be from 2026.

The DWP admitted that public sector schemes represent a problem, however. Accounting for around 20 per cent of all active and deferred members in scope, they have been affected by the McCloud remedy and the need to transfer all members from legacy to reformed pension schemes, which poses a significant data and administrative challenge.

The consultation explained that more than half of respondents to the Pensions Dashboards Programme’s call for input said public sector schemes should be onboarded “as early as possible in the first stage”.

But the DWP noted the “considerable work” entailed by the McCloud remedy, which involves not only challenges for affected pension schemes and administrators, but also primary and legislation in parliament, all of which is time and resource-intensive. 

In light of which, the consultation proposed a staging deadline for public sector schemes for the end of April 2024.

It added, however, that “recent engagement across government has further highlighted the scale of the challenge surrounding the implementation of the McCloud remedy”. 

“Following the consultation, we may therefore need to consider what other mitigations might be needed to ensure the successful staging of [public sector pension schemes] in line with our staging principles,” the consultation stated.

Sir Steve Webb, former pensions minister and partner at LCP, argued that “ministers have repeatedly over-promised and under-delivered on this goal”.

He said: “The biggest headaches include bringing on the public service schemes, which have major headaches of their own to deal with, and defined benefit pension schemes, where complex new calculations may be required. It is vital that the government ensures there is no further slippage in this project and that the benefits of dashboards are available to the public as soon as possible.”

Ian Colvin, head of LGPS benefit consulting at Hymans Robertson, added: “It makes sense to give public service pension schemes time to deal with the implications of McCloud before their dashboard staging date, particularly as the intention is for McCloud data to be held for dashboard purposes.

“We think the deadline is achievable, but it is highly dependent on legislation and guidance (which will be different for different schemes) being timely and workable,” he noted.

“It would be undesirable for McCloud delays to push back [public sector pension schemes’] staging dates, but there is a risk that staging before McCloud details have been ironed out would also undermine the integrity of the project due to missing/incorrect data.”

Minimal fines?

In the section detailing compliance and enforcement, the DWP explained its intention to give TPR powers to issue compliance notices to trustees, scheme managers and third parties, as well as penalty notices for non-compliance. 

At its discretion, the regulator will be able to levy penalties of up to £5,000 for individuals and £50,000 “in other cases”.

“The success of pensions dashboards will be dependent on the co-operation of thousands of organisations working together to provide individuals with their pensions information. The government has concluded that the fastest way to achieve this is to make participation compulsory,” it said. 

“A key part of this is the development of a robust and effective enforcement regime which allows for appropriate enforcement action to be taken in the case of a failure to adhere to any of the proposed requirements and provides a significant deterrent to noncompliance.”

Although the maximum fine is less, for example, than the application fee for launching a collective defined contribution scheme (£77,000), experts broadly felt that the proposal was proportionate.

Karl Lidgley, client manager for third-party administration at Hymans Robertson, said: “Schemes and the industry generally will do what’s best for members to comply with legislation and are unlikely to not comply without good reason. Therefore, the potential maximum fine for non-compliance seems proportionate and fair overall.”

Philp concurred, saying: “Large schemes and providers will have been planning for the introduction of dashboards for a while now so, although there might be some teething problems for some in connecting to the ecosystem, there is unlikely to be wilful non-compliance among this group.”