PDP webinar: connection and progress update Q&As

Joe Stacey, Senior Industry Engagement Manager at the Pensions Dashboards Programme (PDP), appeared alongside guest speakers John Higgins from the Department for Work and Pensions (DWP) and You Yu from The Pensions Regulator (TPR) to discuss the publication of DWP guidance on connection: the staged timeline and provide a PDP progress update.

These Q&As detail the questions asked by attendees and the answers given by the panel during the webinar.

Watch PDP webinar: connection and progress update.

Connection

The connection guidance has a ‘connect-by’ expectation. As this is guidance, must providers and schemes meet these dates?

The ‘connect by’ dates in guidance are not mandatory. However, there is a requirement in the Pensions Dashboards Regulations that pension providers and schemes in scope must have regard to the guidance, and be able to demonstrate this to the relevant regulator upon request.

The ‘connect by’ dates in guidance can provide some flexibility. For example, some administrators may have a large book of schemes, perhaps all connecting very close together.

However, where trustees or managers and pension scheme providers connect later than their ‘connect by’ date in guidance, they risk not being connected by the connection deadline in legislation.

There may be some specific situations where some schemes may not be able to meet their ‘connect by’ date. For example, they have planned to change their administrator, or are in the buyout process. Schemes are therefore advised to discuss their intentions with the administrator or integrated service provider (ISP) and inform PDP.

Are many funds choosing to have a direct connection rather than an ISP?

PDP expects that most pension providers and schemes will connect to the ecosystem by contracting a third party, either through their administrator or an integrated service provider (ISP) that their administrator has chosen for them. The recent TPR analysis has helped to provide further clarity.

For those building their own direct route to connection, PDP is preparing to start connection testing with them later this year, which should help to support wider industry connection beginning in April 2025.

For pension providers or schemes building their own connection and have yet to engage with the programme, it is advised to discuss these connection plans by emailing [email protected].

What are the pros and cons of a direct connection as opposed to using an ISP?

There are 2 ways to connect to the pensions dashboards ecosystem. These include:

• building your own connection (to connect directly), using an in-house technical solution
• buying a connection solution, which could be provided by your existing third-party administrator, or by an ISP

Building a connection is a significant undertaking requiring technical expertise and resource to meet all technical standards and requirements, which include system availability and response time.

It is up to the discretion of the scheme on the method of connection.

More information on routes to connection can be found in our previous FAQs newsletter.

Can a scheme connect before all its data is available to view? For example, if calculations of annualised accrued value (in line with guidance issued on by DWP on 12 April 2024) are not ready, can a scheme connect without this data?

The scheme must be able to find members and send them data as soon as they are connected and meet the requirements that are applicable.

Schemes must provide value data immediately if it is based on a statement provided to a member in the last 13 months, or a calculation made for the member in the last 12 months (for example, if there was a previous request made on a dashboard). Where this is not the case, schemes will have 3 working days to return value data where all benefits provided to the member are defined contribution (DC) benefits, and 10 working days in all other cases, such as defined benefits (DB) and hybrid benefits, where the value is calculated by reference to both DB and DC elements.

TPR recognises that full compliance with all pensions dashboards duties as soon as the scheme has connected is a big challenge. TPR will be pragmatic in their approach and would take actions on a case-by-case basis. One of the main considerations that TPR will focus on is the behaviours or breaches that pose the greatest risk to a saver’s ability to receive a complete and accurate picture of their pensions.

When trustees and scheme managers make decisions around connection, there is a need to consider the balance of risks and whether the impact of the potential breach is materially significant to TPR.

If dashboards go live before the connection deadline for public schemes, how will queries be managed for users whose scheme is not on their dashboard?

The ‘go live’ date for when the service is made available to the public (dashboards available point) has not been specified yet as it is determined by the Secretary of State.

Before this point, all users will be by volunteers invited by or on behalf of MaPS, for testing and service improvement.

The testing with volunteers will take into account and be based on the numbers and types of pension providers and schemes connected at any point.

Before the dashboards available point, users will need to be invited to test the service so demand can be managed and ramped up over time.

If an occupational pension scheme goes through a buyout process before its connection date and buys out annuities that form part of an FCA product, does the ‘connect by’ date change?

Schemes only fall out of the scope of dashboards regulations when the number of relevant members falls to 0. Schemes in a buyout process with over 100 relevant members are not excluded from the requirement to connect to dashboards unless all the members in the schemes are pensioners or all relevant members buys out individual annuities.

Once the buyout is completed, the relevant members will no longer be a member of the occupational scheme and will instead become an new individual member of a private pension scheme and subject to Financial Conduct Authority (FCA) regulation.

According to FCA rules, the providers will have to provide member’s administration information to the relevant scheme members no later than 3 months after this member’s joining date.

If schemes wish to connect early, what is the process? What should schemes do if they think they might miss their staging date?

PDP is developing guidance surrounding connection and will make this available on the PDP website later this year.

In most cases (with the exception of those building a direct route to connection), pension providers and schemes should be talking to their administrators and ISPs about connection and what is required by the dates in the staging timetable.

DWP has shared guidance on deferred connection, setting out the issues pension providers and schemes should consider if they wish to apply for a deferral. Any applications for a deferred connection will need to be made by 8 August 2024. The guidance outlines the specific circumstances in which providers and schemes may apply.

PDP encourages pensions providers and schemes to work towards connection in line with the dates in the staging timetable in guidance. This will manage connection in an orderly fashion and gives all pension providers and schemes the best chance of achieving connection before the legislative deadline of 31 October 2026.

The Pensions Regulator guidance states schemes will need to register with the Money and Pensions Service (MaPS) governance register, how is this done?

Registration with MaPS is also a requirement under the regulations and Financial Conduct Authority (FCA) rules. This is done as part of the PDP connection process.

For providers and schemes connecting via a third party, registration will be managed by that third party.

Guidance

What does ‘having regard to the guidance’ mean?

Trustees or managers and pension providers must consider the guidance when making decisions or taking actions in relation to preparing to connect to dashboards.

They will need to be able to demonstrate, upon request, how they have had regard to the guidance.

Failure to do so may result in enforcement action by the relevant regulator.

How will PDP ensure that pension providers and schemes adhere to the connection guidance?

‘Connect by’ dates have been set out in guidance with pension providers and schemes grouped together by size and type over different stages. While these will not be statutory, DWP still expects providers and schemes to have regard to the guidance. Trustees will be expected to demonstrate how they have had regard to the guidance.

PDP has been encouraged by the feedback received from leading pension providers who have stated their intentions to adhere to ‘connect by’ dates in guidance. PDP will work with industry and partners to support adherence to the dates in guidance and are currently looking at how to broaden collaboration with industry to make this as effective as possible.

Standards

What do the standards include?

PDP has undertaken extensive consultation with the industry and others, and will continue to do so, in order to produce a set of dashboard standards that are deliverable and effective. The current draft standards are available on the PDP website.

The different categories, such as data standards and technical standards are set out in legislation and have not been amended by the revised regulations. Some of the standards do however need further revisions to reflect industry feedback and technical developments.

Updated PDP data standards have now been shared with volunteer participants and are soon to be published on the PDP website and PDP expects the technical standards and code of connection to be published in the next couple of months.

These documents will be finalised and will then require the DWP Secretary of State’s approval ahead of connection starting. PDP recognises the need to allow industry time to prepare for connection, and will factor this into plans for publication of the approved standards .

What is the expected publication of data standards for wider industry?

An updated draft of data standards was shared with PDP’s volunteer participants at the end of March 2024.

These will be published on PDP’s website soon, following further refinement in response to volunteer participants’ feedback and final quality assurance.

This follows a commitment that data standards would be published around the same time as DWP’s connection timetable in guidance.

The data standards will remain subject to approval by the Secretary of State for Work and Pensions at a later date, but PDP does not expect further changes at this point.

What is the change in scope between the data standards now and the expected changes arising from feedback?

PDP is in the process of finalising the data standards for publication on the PDP website, following industry review and feedback. The changes made will be recorded in the change log, which will record all changes since the last draft version published by PDP.

State Pension

When will State Pension details be available on the dashboard?

PDP is currently working with the DWP State Pension team on preparations for connection testing later this year and ensuring that State Pension will be available.

DWP confirms that connecting the State Pension is a priority and expects to be one of the first organisations to be connected at the start of the connection testing period.

Orphaned schemes

Where schemes are orphaned from their trustees, what can TPR do to help schemes identify trustees where they have lost contact?

TPR aims to publish their response regarding orphaned schemes following the consultation of their compliance and enforcement policy.

TPR are aware of the potential issues faced by industry and are reviewing the scale of the potentially problems. The majority of these schemes are not yet in scope for dashboards, but TPR is trying to establish the size of the orphaned schemes to see what support they are able to provide for the schemes and administrators.

Programme timeline

When will more information on the programme timeline be published?

PDP is working closely with the organisations building a route to connection on delivery milestones, which will include the conformance and compliance test strategy.

Anyone considering building a route to connection should get in touch with PDP. Now that DWP guidance the staged timeline has been published, PDP will be updating the connection hub and programme timeline, which will be published on the website.