Master trusts and pension providers regulated by the Financial Conduct Authority will be the first schemes to provide data for the pensions dashboards in 2023, according to a new call for input published on Thursday.
The document, published by the Pensions Dashboards Programme, details proposals for the staged compulsory connection of schemes to the project.
Aiming to achieve the widest coverage of pensions as soon as possible, staging will be divided into three waves. First, the largest schemes with more than 1,000 members will be required to provide data to the dashboards. The second wave will include medium schemes, with 100 to 999 members, followed by the small and micro schemes, with 99 or less members.
The document confirms the timeline published by the PDP in December, which aims to roll out the project in 2023.
Whatever the final timescale for connection agreed upon, it is imperative that nothing is done to put at risk the pension savings of scheme members. It is better to do it right, than to do it quickly
Nigel Peaple, PLSA
Master trusts to lead the way
The first wave will commence in April 2023, running up to two years, starting with master trusts and FCA-regulated providers.
Defined contribution schemes used for auto-enrolment will be the next to be asked to share their data during that year, while all remaining occupational schemes with more than 1,000 members will follow. PDP expects schemes in this last group to include the largest defined benefit schemes.
The document also revealed that the Department for Work and Pensions is working with HM Revenue & Customs to “ensure that the infrastructure required to provide state pension information will be in place ahead of the first publicly available dashboard”. PDP expects this data to be part of the first cohort.
The call for input detailed that wave two will not commence until the bulk of large schemes have successfully connected, which is unlikely to happen before 2024.
This will allow more time for the integrated service provider market to emerge, which will be critical to onboarding smaller schemes and enabling learning from the first wave to inform the approach to subsequent waves, according to PDP.
Timing for wave three should be determined in line with the ISP market forming, the document stated.
The PDP officials consider the proposed approach to be “ambitious”, having the potential of covering 99 per cent of pensions “in scope for dashboards within two years from the first staging date”.
Darren Philp, director of policy at Smart Pension, said the proposed staging is “sensible and as expected, and helps achieve good dashboard coverage quickly, which is important for the dashboards’ success”.
Nevertheless, he noted that the “timetable is ambitious and there is a lot of work for schemes to do to prepare for the dashboards, but the pieces of the jigsaw are slowly falling into place, which is great news all round”.
Possible delays to timeline?
Despite announcing the staging details, the PDP’s call for input did not include a due date by when all schemes will be sharing data with the dashboards ecosystem.
Philp noted that “while it makes sense for smaller schemes to stage later, we need to ensure that there isn’t undue delay in delivering comprehensive coverage if the dashboard is to achieve its potential”.
He pointed out the remedy to the McCloud judgement — currently a giant administrative task for public sector schemes — as a “tricky issue” that needs to be resolved before these pension funds can share their data.
Nigel Peaple, director of policy and advocacy at the Pensions and Lifetime Savings Association, is expecting some data to be available to savers “perhaps in 2024 or 2025”.
However, given the complexity of the task, “and the fact that we do not yet have complete certainty about the data requirements, it is too early to assess whether this timeline is achievable”, he warned.
Peaple said: “Whatever the final timescale for connection agreed upon, it is imperative that nothing is done to put at risk the pension savings of scheme members. It is better to do it right, than to do it quickly.”
Consultation to inform new legislation
As Pensions Expert reported on May 13, DWP will be launching a consultation on the pensions dashboards’ draft regulations, which will include rules on staging.
PDP stated that the feedback from the call for input, which closes on July 9, will help inform policy development ahead of the new legislation.
Guy Opperman, minister for pensions and financial inclusion, said: “Making dashboards available to people at the earliest opportunity is a key part of our strategy to get people more informed about and involved with their pensions savings.
Dashboards milestone reached as PDP looks for architecture supplier
The Pensions Dashboards Programme has issued an invitation to tender for a supplier to provide digital architecture.
“So I would encourage anyone with an interest in the dashboards to feed in their views on the programme’s emerging proposals for how and when we bring pension schemes on board from 2023.”
To support providers and schemes “with fully assessing the impact of the proposals and in preparing to connect to the ecosystem”, PDP created an information hub.
It will also run two webinars aimed at data providers, where PDP officials will provide an overview of the digital architecture (June 8) and explain the policy around staging (June 9).
