The Pensions Regulator is planning to impose £50,000 fines on firms who fail to fully comply with new dashboard regulations.
These large fines were proposed in the regulator’s latest consultation on the compliance and enforcement regime for pensions dashboards.
Under these proposed rules, trustees and managers will have to comply with strict rules on following up on find requests from dashboard users, and, if there’s a match, provide set information to users on their pension schemes.
TPR has said it will take a “pragmatic” approach to regulations but it says “reckless” non-compliance could results in penalties of up to £50,000 for the scheme and £5,000 for individuals.
TPR’s compliance framework will be based on receiving regular data from the Money and Pensions Services, (MaPS), which will help it identify breaches and look at trends across the landscape. The FCA recently announced similar rules for providers of personal and stakeholder pension schemes.
AJ Bell head of policy development Rachel Vahey says: “Pensions Dashboards are fast on the way to becoming a reality. Large occupational schemes and FCA-regulated firms have to connect to the MaPS central architecture from April next year.
“All these pension schemes have to follow detailed rules on how to connect and how to search for a member once they receive a find request from a dashboard user, following strict timescales. They also have to return set information to a user if they have a positive match, including details about the pension scheme and their projected fund value and income at retirement
“This is a big commitment, and the government and regulators naturally want to make sure that the project is a success and that pension schemes are taking dashboards seriously.
“The TPR wants feedback on its proposed compliance and enforcement policy. It will be monitoring occupational schemes for non-compliance while at the same time realising this is a brand new operation and promising to take a pragmatic view, but where schemes wilfully ignore their responsibilities, TPR is threatening to come down hard with the threat of fines up to £50,000.
“Individual trustees and managers may also find they are on the hook personally, as TPR has outlined an individual fine of up to £5,000. To avoid being put on the regulator’s naughty step, schemes will have to make sure they connect their entire membership by the deadline and, once connected, find savers and return data as expected.
“It’s crucial that schemes connect the right pensions to the right saver. Schemes will have to walk a fine tightrope when devising their matching rules. Match the wrong people and that’s data protection breaches; but match too few people and the regulator may want to take a closer look.”