Planning for pension dashboards

Next year sees the first staging dates for pension schemes to connect to pension dashboards, so members can securely access their pensions information online all in one place to support better retirement planning. Schemes should be planning for connection now.

Pension savings

Many employees are in defined contribution schemes in which the contributions, together with the investment returns on those contributions, are used at retirement to provide income. These schemes don’t promise a particular level of income. Employees take on the burden of monitoring their pensions and the risk that the contributions or investment performance are inadequate for their needs. That makes it important for them to be able to access benefit information so they can make the best choices for their investments and retirements.

Connecting to pensions dashboards

The Money and Pensions Service is tasked with developing its own non-commercial dashboard and facilitating the development of commercial dashboards. The Department for Work and Pensions (DWP) has published guidance for connecting public and private sector schemes to the pensions dashboards ecosystem here, together with a non-mandatory staged timetable prioritising connection of the largest schemes and providers.

Criteria:

• Schemes with 100 or more relevant members at the scheme year end between 1 April 2023 and 31 March 2024 must connect to pensions dashboards by 31 October 2026
• Smaller schemes can apply to connect voluntarily. Schemes that reach 100 or more relevant members after 1 April 2024 have to connect by the later of six months after the end of the scheme year in which the threshold was released and 31 October 2026
• Trustees and scheme managers can apply to the DWP to defer connection for up to 12 months if, before 9 August 2023, they had embarked on a programme to transfer data to a new administrator; and/or had entered into a contract obliging them to retender the administration of the scheme, the timetable for this is reasonable and conflicts with the connection deadline
• Applications to defer must be made before 8 August 2024.

Reporting and compliance

The legislative regime compels schemes in scope to give certain information to dashboard providers. This information, set out in reporting standards, must be reported through the dashboards to monitor compliance. Complaints, records of the criteria used to match members to their pensions and how the steps set out in the connection guidance – or alternative steps taken to achieve the same result – that have been carried out must be kept for at least six years from the end of the scheme year to which they relate.

The Pensions Regulator can issue compliance and penalty notices to trustees, scheme managers and third parties that fail to comply with the requirements. These can include fines of up to £5,000 for an individual and up to £50,000 in other cases.

Trustees and scheme managers should have dashboards on their agenda, check the connection timetable and, with their service providers, agree a plan for how and when connection will be delivered.