The Department for Work and Pensions launched a consultation on its draft dashboards regulations in January that set out detailed data presentation and communication requirements, and reaffirmed the government’s commitment to having both ‘find’ and ‘view’ functionality at launch.
The industry has long been concerned that the workload entailed by find and view could make the proposed staging deadlines unachievable, while public sector schemes in particular are thought most at risk of missing their onboarding date.
The government acknowledged that dashboards may contain incomplete information at launch and set out ways in which schemes could mitigate any damage resulting from this. But the relatively vague wording around who has liability should incorrect information be presented, or were members to misinterpret the information when making decisions, has caused significant alarm in the industry.
PLSA recommends three thresholds for launch
In its consultation response, the PLSA recommended that the government and the industry agree to three “threshold tests” that must be met before dashboards are officially launched to the public.
It acknowledged that they would represent a “huge task” for the industry, but said they would be essential if dashboards are to launch successfully.
The three tests relate to coverage, accurate data matches and user understanding.
First, dashboards should not launch until enough schemes are connected so that a “majority of savers” have the potential to match with their pension.
Second, data matching should be sufficiently advanced that a majority of savers will be able to see most of their pensions on the dashboards, while third, user testing should take place to build confidence in the system and ensure that savers understand the information presented, and are not using it to make inappropriate or mistaken decisions.
The PLSA estimates that clearing these three thresholds could take 12-18 months, which would place the launch date after the first round of schemes have connected in 2023, but it cautioned that it may take longer.
It stressed that, at present, the regulations do not provide sufficient support for schemes when it comes to data matching, and urged regulators to take a “highly pragmatic and supportive” approach to compliance and enforcement for the first 12 months following the dashboards availability point.
It also flagged concerns around liability waivers, stressing that dashboards must clearly state that the figures provided are indicative, and schemes are absolved of all responsibility for decisions taken by savers.
Nigel Peaple, director of policy and advocacy, at the PLSA said: “The draft regulations represent a big step forward for making pensions dashboards a reality. However, with a number of important outstanding issues still to be resolved, the existing timeline for launching public dashboards still looks highly ambitious.
“Extensive user testing will be needed to reach agreed quality thresholds so that savers are not immediately disappointed by a lack of information, or worse suffer detriment as a result of making the wrong decisions due to dashboards not being designed correctly,” he continued.
“We hope we will be able to work closely with the government, regulators and the [Pensions Dashboards Programme] on the many next steps in the development of dashboards so we can be sure they will work for savers from launch.”
Pessimism over dashboards timescales
Pensions and investment consultancy Isio reported that the overall tone of a recent pensions administration network meeting was pessimistic, with scheme managers in attendance supporting the dashboards concept but doubting whether it would be deliverable within the short timescale set out by the government, given the scale of the challenge.
Several specialists also cast doubt on whether the dashboards would decrease managers’ workload long term, Isio said, fearing an increase in member queries asking in particular why their dashboard did not match their individual scheme quote.
Isio director Samantha Coombes, who chaired the event, said: “The overriding feeling from the group was that there are too many unanswered questions and not enough time to answer them. There is a distinct and worrying lack of information on the plans for phasing, security and implementation.
“The industry is nervous and, while the intention behind the initiative is clearly admirable, the potential unintended consequences need to be addressed quickly.”
The PLSA likewise highlighted the government’s strict timescale for implementation, which has not changed despite the draft regulations favouring more complicated requirements than were initially proposed, such as the display of pension income information.
The PLSA explained that the draft regulations have seen a shift away from what it termed a “send what you already provide” approach to dashboards information, under which schemes would only have to return information that is “already available”.
Because the readily available information varies from scheme to scheme, this approach for dashboards was deemed “sub-optimal”, as dashboards require consistency. Therefore, the draft regulations imposed a new, more rigorous and standardised set of information requirements that will necessitate some schemes compiling and providing information they do not currently have.
The PLSA said it supported the intent behind the move as it would create a product more useful to members, but it said it was concerned about the extra workload it entailed.
“There is no doubt that this will make it more challenging for all schemes to connect by the staging windows that have been set out,” it explained.
“We are disappointed there will be no increase in timescales to accommodate these changes.”
It added that, even if dashboards connection is possible within the timeframes set out, “all are agreed that the data and coverage is unlikely to be good enough for sharing with the public — ie, it will not achieve our proposed [dashboard availability point] thresholds regarding coverage, data matching accuracy and saver understanding”.
“Therefore, we are arguing that, in order to resolve the many difficulties expected, the [dashboard availability point] should not take place until extensive testing has taken place and we estimate this to take place 12 to 18 months after the staging timeline is completed,” the PLSA said.
Benjamin Mercer is senior reporter at FTAdviser's sister publication Pensions Expert
