The Society of Pension Professionals (SPP) has outlined areas for improvement in response to the Financial Conduct Authority’s (FCA) consultation on proposed new rules for pension dashboard providers, noting timing and consistency issues.
The deadline for pension providers to have their dashboard services up and running by 30 June 2023, with connections to be made within a three-month timeframe prior to that, is exceedingly ambitious according to SPP. SPP highlights that only the smallest providers are allowed to request a later implementation date under the recommendations.
Compliance with the final FCA rules and the money and pensions service’s technical standards is contingent on finalised rules, although the standards have not yet been put out for consultation and are unlikely to be finalised until the end of 2022, alongside the final FCA rules.
Additionally, the market for integrated service solution providers is still maturing and will not be ready for deployment before the deadline. SPP says that there is likely to be limited capacity for even the smaller firms to contract with an integrated service solution provider in the time available.
According to SPP, there is a problem with consistency. The Department for Work and Pensions (DWP) and MaPS, among other entities responsible for regulating and enforcing dashboard standards, could result in a patchwork of requirements, timeframes, and objectives. The worst-case situation for providers, according to SPP, is if the DWP and the FCA have separate rules, which would significantly raise operational complexity and cost.
SPP points out that the FCA and the DWP, for example, do not have the same standards in terms of how long the provider has to resolve a prospective match; the DWP permits 30 days, while the FCA does not specify a particular period of time, enabling the provider to decide what is acceptable.
SPP suggests that providers be given more flexibility by allowing all companies to request a delayed implementation date. The bodies in charge should all be on the same page and have the same needs, timeframes, and objectives. More opportunities and abilities to integrate the various regimes could minimise provider costs. Consumers will benefit from the same experience regardless of who regulates their dashboard, which could lead to increased trust in and use of dashboards.
Society of Pension Professionals’ Financial Services Regulation Committee member Sharon Piert says: “The Society of Pension Professionals remains very supportive of pensions dashboards. However, issues remain around the proposed implementation timeframe for the FCA’s new rules, alongside the danger of inconsistency with rules issued by other regulatory bodies.
“Offering flexibility to providers over the timing of compliance with the myriad of yet-to-be-finalised rules and ensuring consumers can benefit from consistent rules governing all dashboards is essential. As an industry, we will continue to work with regulators to deliver this flexibility and consistency, and ultimately the successful rollout of the dashboards project.”