The Financial Conduct Authority has said the pensions dashboard will increase competition in the advice profession and offer consumers better value for money.
In a consultation paper titled Pensions dashboards: proposed rules for pension providers, published today (February 11), the FCA suggested measures to be taken which will increase pressure on providers and advisers and ensure the products and services offer value for money.
The FCA said: "Equipped with the basic information that pensions dashboards make available, without charge, consumers might be better placed to engage in retirement planning, use advice or guidance, and ultimately make better informed decisions throughout their pensions saving and pensions access journeys.
"Greater consumer engagement could drive effective competition, by increasing pressure on providers and advisers to ensure the products and services they provide to consumers offer value for money and meet consumers’ needs and demands."
The current implementation data for the pensions dashboard is June 30, 2023 for providers for personal and stakeholder pension schemes. Those which are smaller pension providers will have a transitional provision that will offer a later implementation deadline of October 31, 2024.
The FCA said by the deadlines, pension providers must be ready to receive requests to find pensions, and search records for data matches.
The proposed rules require providers to search their records for matches immediately upon receiving ‘find data’ from the Pension Finder Service, part of the Money and Pensions Service digital architecture.
Automation will be required to conduct searches in this timeframe and Maps technical and data standards will specify how find requests should be received.
The FCA said it will require pension providers to supply this information when requested and providers will be required to maintain records for six years.
Firms will also complete connection of their personal and stakeholder pension schemes, including self-invested personal pensions, to the digital architecture in line with Maps connection, security and technical standards.
In order to meet the proposed requirements, the City watchdog said providers could connect their existing administration systems and databases directly to the ecosystem.
Alternatively, they can choose to use an integrated service solution to transfer information from host administration systems and databases to the ecosystem.
The FCA said adhering to these standards will require providers to undertake some pre-connection steps and therefore, the proposed rules will come into force three months ahead of the implementation deadline.
There will be a transitional provision making clear that providers will not have to comply with the rules other than the requirement to comply and have regard to the relevant Maps standards before their implementation deadline.
The FCA is inviting feedback on its proposals by April 8, 2022. The feedback will inform its ongoing work to support pensions dashboards, as well as the final rules it intends to confirm in the Autumn.
Sarah Pritchard, executive director of markets at the FCA, said: “We are one of many organisations involved in making the pensions dashboards a reality, and we are working closely with the government and others in support of their rollout.
“We hope that the dashboards are successful in making it easier for consumers to access and engage more pro-actively with their pensions and support decision making on retirement planning.”
Later this year, the FCA will separately consult on the regulatory framework for the operators of qualifying pensions dashboard services.
The Department for Work and Pensions’ current consultation specifies the criteria a dashboard service must meet to become a QPDS.
Last year, the Pensions Dashboards Programme partnered with three commercial dashboard providers to work with during its initial testing phase.
The PDP has selected Aviva, Moneyhub and Bud to work alongside the Money and Pensions Service’s non-commercial dashboard in the initial test phase of the pensions dashboards ecosystem.
The test phase will run for six months from December 2021 and see the chosen providers prepare to connect their dashboards to the central digital architecture.
Last month, rules set out by the Department for Work and Pensions revealed financial advisers will be granted access to their clients’ data on the pension dashboards.
The DWP published a consultation in January on the draft rules, setting out what data should be included and how it should be displayed to people.
As part of this the government confirmed advisers will be able to view their clients’ pensions via both government and commercial dashboards, which has been welcomed by the industry.
sonia.rach@ft.com
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