Pension providers could be on the hook for compensation of up to £350,000 under the Financial Ombudsman Service's rules for pension dashboards, according to a pensions expert.
According to the Pension Schemes Bill presented last week in parliament, the Financial Conduct Authority will be in charge of making rules for providers around sharing their clients’ data and hosting pension dashboards.
The watchdog will also set out how pension information is to be provided and how advisers and other authorised persons can access the data.
Romi Savova, chief executive at PensionBee, told FTAdviser the new rules could mean “consumers should be able to complain to the Fos regarding unfair treatment, negligence or specific rule breaches” in respect of dashboards.
She said: “This is appropriate in the context of all the potential activities that could be realised as a consequence of sharing pensions data and provides a reasonable counterbalance to the expected innovation dashboard services will deliver.”
Providers and pension schemes will also be supervised by The Pensions Regulator in this area, facing a fine of up to £50,000 if they fail to provide data for the dashboards.
Nathan Long, senior analyst at Hargreaves Lansdown, noted that consumer protection needs to be front and centre within the design of pension dashboards, which is why "a rigorous sign off policy for dashboard providers coupled with the backing of Fos makes complete sense".
He said: "However, protecting consumers also means ensuring they maximise their potential retirement savings and this is where the project needs to be ambitious, ensuring it has addressed how data can be shared to dashboard providers to enable modelling of future savings and the ability to nudge people towards better outcomes."
Pension dashboards will ensure people throughout the UK have easy access to information about their pensions, who manages them and what they are worth.
The department for Work and Pensions confirmed in December it will introduce multiple pension dashboards, with the first one being developed by the government's guidance body, the Money and Pensions Service.
An industry delivery group brought together by the guidance body will set out a timetable for other fully operational dashboards, as well as setting standards and ensuring security across the portals.
Kay Ingram, director of public policy at national firm LEBC, said if pension dashboards were simply providing information, rather than advising or facilitating a course of action, it is expected that the Fos "would only be concerned with the accuracy of the information provided on the dashboard and instances where any inaccuracy could cause loss or inconvenience to the consumer".
Ms Ingram believes that IFAs "would welcome greater accountability for the accuracy of scheme information being provided, as incomplete information from schemes and providers and lengthy delays in providing the information add to the time it takes to advise an individual and the cost of that advice".
She added: "In extreme circumstances it could lead to the wrong advice being given as a result of misinformation.