Pensions dashboards – DWP publishes connection guidance

Introduction

The DWP published its Pensions dashboards: guidance on connection on 25 March 2024 (“the Guidance”). The Guidance sets out a staged timetable for occupational pension schemes and personal and stakeholder pension providers to be connected to the pensions dashboards ecosystem and be ready to respond to “find” and “view” requests.

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In this Alert

• Key points
• Background
• Connection timetable
• Demonstrating compliance with the Guidance
• What are key trustee duties?
• What is still to come?
• Next steps

Key points

• Trustees of in-scope schemes and FCA-regulated pensions providers must connect to the dashboards ecosystem by 31 October 2026.
• The Guidance sets out a phased connection timetable for schemes to connect, starting with schemes with the largest memberships. The first connection date is 30 April 2025, with the smallest schemes having to connect by 30 September 2026.
• The Guidance isn’t mandatory but trustees must “have regard to” it, ie they must take it into account in any decision making, and be able to demonstrate how they have done this.
• Failure to meet the statutory deadline, or to have regard to the Guidance, could result in enforcement action from TPR or the FCA (as appropriate).
• With just over a year until the first connection date, all schemes should be preparing to connect to the dashboard ecosystem.

Background

The Pension Schemes Act 2021 sets out a framework for introducing a pensions dashboard service, a digital interface designed to enable individuals to see all their pensions information in one place.  Trustees of schemes in scope (all registrable UK-based occupational pension schemes with 100 or more members, excluding pensioners) will need to:

• register their scheme with MaPS and connect to the “digital architecture”
• ensure their scheme can receive both “find” requests (a request sent as the result of an individual searching for information about their pensions) and “view” requests (a request by an individual to see detailed information about any pension which the dashboard shows they have)
• co-operate with MaPS when preparing to connect, maintain appropriate records, and report certain information to both TPR and MaPS.

Compliance with the dashboard requirements was originally due to be phased in from spring 2023.  However, this was postponed in March 2023 and was replaced that summer with a revised single statutory deadline of 31 October 2026 for all schemes, with guidance on a phased connection timetable to follow.

The deadline for connecting to the dashboard ecosystem is separate from when dashboards will be made generally available to the public – this is known as the dashboards available point.  This won’t be until the Secretary of State for Work and Pensions is “satisfied that the dashboards ecosystem is ready to support widespread use of qualifying pensions dashboard services by the general public” and has given the industry at least six months’ notice.

Connection timetable

Trustees must connect by the statutory deadline of 31 October 2026.  However, trustees must “have regard to” the connection timetable set out in the Guidance.  The Guidance highlights the “additional benefits” to schemes and providers of adhering to its connection timetable, including:

• being in a good position to agree a practical delivery plan with their suppliers
• sufficient testing time to enhance their members’ experience of using dashboards, and
• demonstrating good governance and robust risk management.

The timetable is designed to provide the PDP with adequate time to assist and co-ordinate activities to support schemes’ and providers’ dashboards connections. If a “connect by” date is missed, trustees will have to cooperate with the PDP (in line with their statutory duties) to find a new date.

The connection timetable retains the broad framework of a phased approach to connection, starting with the schemes and providers with the greatest number of members.

High-level summary of connection dates

Calculating your connection date

When working out the scheme connection date, occupational pension scheme trustees must look at the number of relevant members (all non-pensioner members) at the “reference date”, which is the scheme year end date in the period between 1 April 2023 and 31 March 2024.

Deferring connection when changing administrator

Where certain stringent conditions are met, there is a statutory process for deferring the connection deadline of 31 October 2026 when changing administrator.  The Guidance acknowledges that changing administrator can be a “significant process” and that it may be “excessively burdensome” to connect to the dashboard ecosystem by the connection date in the Guidance.  If trustees do not believe it is possible to connect by the date in the Guidance, they do not have to make a formal application to defer, but should:

• review the deferred connection guidance, which sets out information that they may wish to consider, and
• communicate their plans with the PDP and TPR “at the earliest opportunity”.

FCA-regulated providers

FCA-regulated pension providers (including SIPP and personal pension providers) must also connect to the dashboard ecosystem by 31 October 2026.  The FCA Handbook requires firms to “have regard to the guidance with due skill, care and diligence”.  When calculating their connection date, FCA-regulated pension providers should calculate the number of pots in accumulation across all the relevant pension schemes the provider operates at the scheme year end date in the period between 1 April 2023 and 31 March 2024.

Demonstrating compliance with the Guidance

Trustees and pension providers must consider the Guidance when making decisions or taking actions in relation to preparing to connect to dashboards, and be able to demonstrate, upon request, how they have had regard to the Guidance.  This includes, but is not limited to:

• not making final decisions about connecting before engaging with the Guidance
• being able to demonstrate that adequate governance and processes for making such decisions are in place. The reasoning for decisions should be clearly considered and documented, as well as how relevant risks are identified, evaluated, and managed
• making sure that access is available to all relevant information before making decisions and acting upon them. Trustees and providers should keep clear and accurate audit trails to demonstrate the decisions made, the reasons for them and the actions taken.

If trustees or pension providers are unable to demonstrate how they have had regard to the Guidance, this may result in enforcement action by the relevant regulator.

What are key trustee duties?

As a reminder, the key duties for trustees in relation to dashboards can be broken down into three main areas:

• connecting to the dashboard ecosystem. Trustees will need to decide how to connect.  They should talk to their administrators and software providers to assess whether they can meet the scheme’s needs, or whether they should engage a separate integrated service provider
• processing find requests. Trustees will need to decide the data items that they are going to use for matching purposes. As a starting point, trustees should audit their scheme data and put in place a plan to improve and / or digitise data, if needed
• responding to view requests.  Trustees will need to provide the relevant information on receipt of a view request, including value data, ie a member’s pension values. The value data that needs to be provided will depend on the member’s status and the benefit type.

What is still to come?

Revised standards

Standards cover the technical and operational detail that underpin dashboards legislation.  A suite of draft standards was published in late 2022, but the PDP has confirmed that it will progress work on the draft standards in 2024, with the data standards expected to be published shortly.

TPR’s compliance and enforcement policy

TPR has discretion to issue penalties of up to £5,000 to individuals and up to £50,000 in other cases for any single instance of non-compliance.  TPR has said it will use its powers “fairly and proportionately” and its approach will be set out in its compliance and enforcement policy.  TPR is considering what, if any, changes need to be made to this policy, which was consulted on in late 2022.

Next steps

With just over a year until the first connection date, and a much tighter timeframe for connecting schemes, the publication of the Guidance serves as a timely reminder for trustees to make sure that preparation for dashboards is firmly on their “to do” lists.

Trustees should continue with their preparatory work and can use TPR’s guidance and checklist, along with PASA’s connection readiness guidance, to help with this.

For any assistance with your preparations, or if you would like to discuss any of the above, please speak to your usual Sackers contact.