How will the dashboard programme innovate pensions?

• the security of the ecosystem is fully assured;
• the user experience has been extensively and robustly tested;
• user behaviours have been understood and any adverse impacts or unintended consequences mitigated;
• the right rules and regulations are in place; and
• the service has enough coverage of pension providers/schemes and enough information about those pensions so that it demonstrably meets a user need and is useful to a significant majority of people.

Further information can be found at the PDP website. 

How the dashboard works

To achieve the PDP’s objectives the operating architecture comprises several interacting components. An individual registers with a dashboard and provides their personal details. They can also authorise financial advisers to act on their behalf granting 'find', 'view' and other access permissions.

This information is sent to the PDP ecosystem, which undertakes an identity check and records consents and authorisations.

The PDP ecosystem forwards find requests to pension providers via their direct integration layer or an ISP.

Advisers, schemes and self-invested personal pension providers need to be braced for confused members.

When matches are found, unique identifiers are created (PeIs), and details sent back to the PDP ecosystem where the PeIs are recorded before being returned to the dashboard. 

The dashboard can now send view requests to the direct integration layer or the ISP, who will check consents and authorisations with the PDP ecosystem before sending the desired pension information back to the dashboard. 

In this way, with consent, an adviser can find and obtain details of all their client’s pension benefits.

Considerations for financial advisers

There are a number of issues that advisers need to consider, and these will be discussed within this CPD. However, the main one is to what extent dashboards will create a short-term opportunity and longer-term implications of consolidation.

AS TM1

TM1 is the Actuarial Standard Technical Memorandum 1, known as AS TM1. It is the Financial Reporting Council’s regulations to support consistent and reliable pension illustrations on dashboards for defined contribution pension scheme members and the latest update (v5) was on October 7 2022.

The pension dashboard has the potential to slash the number of small pot pensions.

The latest changes to TM1 include standardising the accumulation rate assumptions and the form of annuitisation at retirement. The new standard is a major step change to increase consistency between pension projections once they start to be provided to pensions dashboards from October 2023. 

AS TM1 will apply to the statutory money purchase illustration statements that individuals receive each year. In addition, the Department for Work and Pensions intends for AS TM1 to determine the illustrations of DC pensions shown on pensions dashboards from October 2023.