The pensions dashboards journey has been a long and winding road with discussions seemingly going on for years.
At last the pace is accelerating now that both the Department for Work and Pensions and Financial Conduct Authority have published their draft regulations and rules for pensions dashboards for consultation.
The DWP consultation runs to 137 pages setting out what trustees and managers of occupational pension schemes will have to do: first to connect to the Money and Pension Scheme pensions dashboard's digital architecture and then to provide data on a ‘find and view’ basis.
These draft regulations also set out compliance, enforcement provisions for The Pensions Regulator and last, but not least, a very ambitious timeline to get all UK pension schemes on board starting from April 2023.
The FCA rules set out complementary proposed rules for pension providers of contract-based schemes, building on the DWP requirements.
Those pension providers who run contract-based pensions as well as master trusts, which are regulated by TPR, will need to be on top of both the DWP regulations and FCA rules.
In addition, the Financial Reporting Council has published its consultation on assumptions underpinning statutory money purchase illustrations (SMPI). FRC is proposing to mandate greater consistency of estimated retirement illustrations used in SMPIs in annual benefit statements across pension providers and on pension dashboards from October 1 2023.
More pension dashboard details will follow, including Maps technical standards and DWP guidance.
Putting consumers at the heart of dashboards
Pensions dashboards will enable consumers, at a time of their choosing, to see all their pensions online securely. This will include all workplace pensions, public and private sector occupational and contract-based pensions, and non-workplace pensions. Crucially it will also include the state pension from day one, which for many is the bedrock of their retirement income.
Pensions dashboards will put the consumer at the heart of the process, with consumer protection a key principle. The consumer will always be in control over who has access to their data and will be able to give delegated access to regulated financial advisers, with specific permissions, and Maps guidance specialists.
The idea is that pensions dashboards will help people to reconnect with their pensions, including with any lost pots, supporting better planning for retirement and growing financial wellbeing. Over time, pensions dashboards have the potential to be a game-changer in terms of improving member engagement, driving greater pension pot consolidation, and hopefully leading to improved member outcomes at retirement.
The first phase of pensions dashboards will be on a find and view basis. Consumers will be able to see the accrued and projected values of their pensions in accumulation. Transactions will not be permitted initially. Pensions dashboards are expected to evolve over time, innovating and expanding to include pensions in retirement and other savings and assets, and allowing transactions.
Maps will develop its own non-commercial dashboard, to be followed by potentially multiple commercial dashboards, hosted by different organisations. Commercial dashboards will have to be FCA authorised and regulated as well as complying with DWP regulations and Maps standards.