Regulatory certainty on the pensions dashboard is "vital", commentators have claimed, as consultations on the proposed framework and design of the long-promised dashboard close.
Girish Menezes, head of pensions administration at Isio, said: "With the pension dashboard going live later this year it is vital that the pensions industry has regulatory certainty as quickly as possible. Administrators need adequate time to onboard, test and learn with the fundamental systems that will underly the dashboard project.
"This will be critical to ensuring that they deliver something truly innovative and ultimately valuable to scheme members.”
Responding to both the Financial Conduct Authority’s consultation on the proposed regulatory framework for pension dashboard firms, and the Pensions Dashboards Programme’s consultation on draft design standards, he said they still lacked "clarity".
His concerns over regulation were echoed by Paul Armitage, head of the National Pensions Trust, who said: "Dashboards are a force for good, but robust regulation is needed to ensure they are a success.
"The FCA's consultation on the rules for dashboard providers gets us most of the way there, but risks creating unintended consequences in how occupational schemes can best help and support their members, with the potential for consumer harm as a result."
Both consultations closed today (February 16).
Menezes added: "We welcome these consultations, but note that until we have clarity on them, it will be very difficult for firms across the industry to adequately prepare.
"Time is tight for third party administrators, who must make a vital decision about how they connect with the dashboard ecosystem, either directly or via an ISP."
The FCA's consultation ... risks creating unintended consequences in how occupational schemes can best help and support their members.Paul Armitage, National Pensions TrustHe said some pensions administrators will be connecting to the ecosystem as early as the fourth quarter this year and most by the first quarter next year.
It is understood that many will be connecting via an ISP service, which provides the layer necessary to deal with the large number of queries that are being predicted.
But administrators currently have very little visibility of what the user journey for the dashboard will look like, which Menezes said means they will "likely have to make critical decisions blind".
“For administrators, the decision on which ISP to connect with constitutes the beginning of a long-term partnership and significant investment. Firms won’t want to make this decision without regulatory certainty around how dashboards will operate, and therefore what kind of experience they will be required to deliver for pension scheme members.
"Further, they will have little or no time for adequate testing."
Data sharing
In the FCA's consultation on rules for Pensions dashboard service providers, which launched on December 1, the regulator proposed banning third parties from charging customers for services linked to pension dashboards.
Also as part of its framework for the initiative, in November last year the regulator said providers would have until August 31 2023 for implementation, in order to align with the government’s extension to a deadline on occupational pension schemes. This deadline was delayed from June 30 2023.
But Armitage said the NPT was also concerned the way in which the pensions dashboard would disallow forms of data exporting. Under the proposed FCA rules, there would only be two places where the user could export their data:
- To themselves
- To the dashboard provider (or firms in the same group with permission to give investment advice).
According to Armitage, this could put occupational schemes at a disadvantage.
He explained that the proposed approach risks creating a two-tier system between master trusts and other FCA-regulated entities.
Armitage added: "Given the tools and calculators offered by occupational pension schemes, we would like to see export of data from the Pensions Dashboard Service allowed to occupational schemes authorised by The Pensions Regulator where they use the services of a regulated PDS through a third party, as would be the case for an FCA regulated entity that is also offering a PDS.
"Many pension savers have a strong connection with their occupational pension scheme and use tools, calculators and financial wellbeing services supplied free of charge by their scheme to help them plan.
"Not allowing members to export data into these tools and calculators risks undermining what we are trying to achieve in helping savers plan for their retirement and, in our view, is a missed opportunity in the construct of the dashboard regulatory environment."
Have your say
What's your view on the pensions dashboard? Email the editor on: simoney.kyriakou@ft.com
