The Department of Work and Pensions (DWP) has deferred the deadlines for the first two initial staging cohorts by two months while expanding the connection window for the first cohort to five months so that connection may begin from 1 April 2023.
The DWP has today published its response to the pensions dashboards consultation.
The government’s staging strategy requires cohorts of schemes to link to the digital architecture and be prepared to answer search and view queries.
The staging deadline for master trusts with 20,000 or more relevant members will move from 30 June to 31 August 2023 as of September 2023 as a result of the change. The staging deadline for money purchase schemes with 20,000 or more relevant members would shift from July 31 to September 30, 2023.
But the deadline of 30 September 2023 for master trust schemes with 10,000–19,999 relevant members and money purchase schemes for automatic enrolling has not changed.
The government has also said that there are existing staging breaks in August, December, and May 2024 within the staging profile. The government has eliminated the August 2023 staging break to account for this postponement without affecting the remaining staging timetable.
In order to determine the most suitable staging deadline for hybrid schemes, the government also decided that hybrid schemes should add up all relevant members in both the money purchase and non-money purchase divisions and view the entire membership as a non-money purchase scheme.
The staging deadline of April 2024 for collective money purchase schemes, generally known as CDC schemes, will remain unchanged by the government. But in cases where a CDC plan is also a hybrid scheme, it will be obliged to adhere to the staging deadline for hybrid schemes.
The government has also changed regulations for Public Service Pension Schemes (PSPS), permitting them to connect to the dashboards’ digital architecture by 30 September 2024 and provide value data on request once a Remediable Service Statement has been given to the member, or by 1 April 2025.
Aegon head of pensions Kate Smith says: “After a few days of turmoil its good to know that the government is 100 percent committed to making pensions dashboards happen at the earliest opportunity. These will be a real game changer for savers, helping them to reconnect with their pensions, by seeing them all in one place online, and improving pension engagement.
“It’s important that everything is in place before schemes and providers begin to connect to the pensions dashboards ecosystem, so there’s still a lot of work to be done. Now that the government has responded after its consultation, the pensions dashboards programme can consult on its connection standards, which will be published imminently. We’re also expecting more consultation from both the FCA and Pensions Regulator.
“The connection timetable is extremely ambitious, especially for the first staging cohort of the largest pension schemes, due to connect between April and June 2023. We’re pleased that the DWP has listened to the industry‘s concerns and agreed to extend the first staging connection time from three to five months. This means that the largest master trust now have a staging window of 1 April 2023 to 31 August. This gives additional valuable time for master trusts to get ready to connect, making sure everything is in order. We’re hoping that he FCA will follow suite once they respond to their consultation setting out the timeline and requirements for providers of contract-based schemes.
“We’re also pleased that there is recognition from the government and regulators that connecting to pensions dashboards will be a steep learning curve for all involved, and that the regulatory approach will reflect this.”
The Society of Pension Professional (SPP) dashboard lead Paul McGlone says: “In many ways this is a helpful response, it provides clarity and adjustments in a number of areas that had been flagged by the industry. But it also recognises that many of the complexities that schemes have to deal with cannot be legislated for in detail and need discretion to be applied, either by trustee or by The Pensions Regulator. The proof will be how that works with real data and members, both in early testing and then as dashboards go live.”
B&CE, provider of The People’s Pension head of pensions policy Tim Gosling says: “The end of the staging window for larger master trusts going back two months gives schemes a bit more breathing space but the timeline for dashboards compliance remains tight. We now need to see final regulations as soon as possible so that we can comply with the decisions outlined in this response document.
“Regarding consumer protection, the main issue in the consultation was whether or not the export of savers’ data should be allowed from third party dashboards. The DWP has chosen to pass responsibility for dealing with the risks this issue poses to the FCA. There is now a lot riding on the FCA’s forthcoming consultation on how third party dashboards should be regulated and it is critical that consumer protection is uppermost in their minds as they draft their proposals.”