In a consultation response that included a raft of tweaks to legislation, the Department for Work and Pensions admitted that the staging timetable was “ambitious”, with around two-thirds of its consultation’s respondents having told the government that they did not believe it had found the right balance between the timing of the initiative’s introduction and sufficient time for schemes to prepare.
The DWP has elected to defer the deadlines for the first two staging cohorts by two months while expanding the connection window for the first cohort to five months, so that connection may still begin from April 1 2023.
The move affects master trusts with 20,000 or more relevant members - whose staging deadline will change from June 30 to August 31 2023 - and money purchase schemes used for automatic enrolment with 20,000 or more relevant members, whose staging deadline will move from July 31 to September 30 2023.
Public sector pension schemes, meanwhile, have had their staging deadline delayed from April 30 2024 to September 30 2024, in order to allow for schemes to implement the McCloud remedy. The government has made a number of other minor tweaks to the legislation in response to concerns from respondents.
“The building and initial testing of the digital architecture by the Pensions Dashboards Programme is already well underway,” said pensions minister Guy Opperman.
“Trustees or managers of pension schemes of all types and sizes should therefore focus their preparations on making sure their data is ready and they have plans in place for how they intend to connect to the digital architecture.”
Not enough time for McCloud
The government published its draft regulations for the dashboards programme on January 31 2022. The Pensions Dashboards Programme is expected to publish its connection standards imminently.
Regarding the staging timetable, there was an almost even split between master trusts and personal pension providers that responded to the consultation, with five supporting the deadline and four against.
Those that agreed did so on the basis that there would be no major changes to the dashboards regulations and data requirements, the government said. One hybrid master trust argued that it should not be part of the first connecting cohort, given that it faced the same challenges as other hybrid and non-money purchase providers.
Most trade bodies, including the Pensions and Lifetime Savings Association, the Pensions Administration Standards Association and the Association of Pension Professional Trustees, seemed to broadly support the staging timetable, according to the government.
“We’re hoping that the [Financial Conduct Authority] will follow suit once they respond to their consultation setting out the timeline and requirements for providers of contract-based schemes,” said Aegon head of pensions Kate Smith.
Implementing the McCloud remedy alongside dashboards has caused concern among public sector schemes, a worry that was voiced in the responses to the consultation.
The Local Government Association strongly disagreed with the time proposed for dashboard staging, on behalf of the firefighter schemes, arguing that the deadline would not leave Fire and Rescue Authorities with enough time to implement McCloud.
“We recognise that the staging timetable is ambitious and there will be challenges faced by industry in meeting the requirements to connect and deliver on the data requirements,” the government said.
The DWP had initially included a handful of ‘staging break’ periods in its timetable.
In order to accommodate the staging deferral, it has now removed the first break, which was originally scheduled for August 2023.
FCA to assess risks of data exporting
The DWP acknowledged the industry’s desire to understand the compliance regime for dashboards, and said that the Pensions Regulator will consult on this regime once draft regulations have been laid before parliament.
It has also made a number of changes to the draft regulations after respondents raised concerns about areas including the calculation of members’ benefits, displaying more than one value and the time allowed for individuals to respond to schemes seeking to match them to their pensions.
The rules have been amended to allow trustees flexibility when representing non-money purchase benefits.
With some respondents having suggested that schemes affected by McCloud will not be able to provide more than one value to account for legacy and new schemes, the regulations have been changed to treat members as having accrued service in the legacy schemes between April 1 2015 and March 31 2022. Once they retire, they can make an election for new scheme benefits.
The rules will also be altered to order schemes to delete ‘find request’ information for individuals where a possible match to a pension has been made, if they do not contact the scheme within 30 days.
Exporting data from dashboards to other parts of dashboard providers’ systems proved contentious among some respondents, meanwhile, with some opposed on the basis that it could help to facilitate scams. DWP said that the FCA would assess the risks of data exporting.
“Allowing individuals to export their data in a safe and controlled way massively enhances the usefulness of dashboards to pension savers,” said independent consultant Darren Philp.
“It is great to see that the DWP has listened to feedback and is not going to rule this functionality out in the regulations.”
Alex Janiaud is deputy editor at FTAdviser's sister publication Pensions Expert
