Pension dashboards – what pension trustees need to do now

As the pensions industry gears up for pensions dashboards, there are some key timescales, considerations and actions pension trustees need to do now to prepare.

I recently chaired a webinar for the Pensions and Lifetime Savings Association (PLSA) Thames Valley Group on this topic. We talked about the fact that while pension dashboards are a hugely positive step forward for people, enabling them to engage with their pensions and retirement savings, the project is complex and will be a logistical challenge for pension schemes of all sizes.

The key benefit of pensions dashboards is they will show a user their pensions information online, securely and all in one place. To make this work, multiple parties and technical services need to be connected – in what is referred to as an ecosystem. It will function like a giant switchboard, connecting users with their pensions via dashboards.

The ecosystem will include the dashboards, data providers’ interfaces and the central digital architecture. The Pensions Dashboards Programme (PDP) is responsible for delivering the digital architecture and services, which will enable data providers and dashboard operators to speak to each other digitally.

The staging dates for occupational pension schemes are set out in the draft regulations. Pension trustees need to be aware of these dates - the deadline by which their pension scheme must connect to the digital architecture – and understand the actions needed and resourcing implications. Schemes can choose to connect earlier if they wish.

Pension schemes will join in three waves, with April 2023 being the first staging date when the largest schemes (more than 1,000 members) will start connecting to the system voluntarily and inputting member details using specified ‘matching data’. Smaller schemes (fewer than 1,000 members) will start connecting from October 2024. Those with 100-124 members will have until October 2025.

Pensions dashboards must meet threshold tests to ensure savers are not met with incomplete or confusing information when accessing them for the first time.

These tests are:

• Coverage – sufficient pension schemes connected so most savers have the potential to match with their pensions.
• Accurate data matches – sufficient matching of savers with the pensions covered by the dashboard so savers can see most of their pensions. As data demand will always be on 24/7, this needs to be stress tested.
• User understanding – there should be a level of confidence gained from user testing to ensure savers are not confused by the information presented or taking inappropriate next steps.

The PLSA estimates the testing period to meet these tests could take 12-18 months , after the first group of schemes have connected to pensions dashboards in the spring of 2023, but it may take longer.

Key steps to take now

There’s plenty pension trustees can do to plan and get ready. Start work now, even if you represent a small scheme, as this will help avoid pain nearer your staging date.

1. Know when your staging deadline is

It is essential you know your scheme’s staging deadline, understand the timelines and create a plan to be ready.

2. Get familiar with the requirements

Keep visiting the PLSA Pensions Dashboards Hub , the Pensions Dashboards Programme (PDP) website and the PDP Data Providers Hub to keep up to date with everything.

Scheme administrators play a key role in this work and pension trustees should seek assurance their provider has a clear understanding and plan to develop the digital framework.

3. Develop a data plan

Identify key actions for your pension scheme’s compliance with pensions dashboards. The Pensions Regulator's new single Code of Practice asks schemes to set up and maintain a data action plan - it makes sense to integrate pension dashboards requirements into this and kick it off now to phase the work in. You also need to add a data review and pensions dashboards into your main trustee business plan.

4. Personal data accuracy and matching

Members need to be able to find their schemes once the dashboards are live. Working out a matching policy early and knowing what member data you will use is crucial. Pension trustees may need to take professional advice on developing a policy.

This is likely to bring out questions such as:

• Do we have data that needs digitising?
• Do we have the quality of data we need to provide matching data?
• Do we have any gaps in our data that need filling?

Future actions

While not an exhaustive list, later in the project pension trustees will need to consider:

• member support pre and post ‘go live’
• data protection compliance
• AVC providers
• administrative impact and contractual arrangements

Here’s a checklist of pension dashboard key steps to help pension trustees and scheme sponsors produce a project plan ahead of their scheme’s staging date. While there’s lots to consider, the good news is not everything needs to be done straight away. The key for trustee success will be spacing out the to do list and having clear milestones to measure against.

It may seem daunting so, if you’d like a little guidance, get in touch and I'd be happy to talk it through.

 

 

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