PDP webinar: connection guidance and understanding AVCs and value data Q&As
This webinar provided information on connection guidance, AVCs and value data.
Joe Stacey, Senior Industry Engagement Manager at the Pensions Dashboards Programme (PDP), appeared alongside guest speakers from PASA dashboards working group, the Local Government Association (LGA), the Department for Work and Pensions (DWP) and The Pensions Regulator (TPR) to discuss their latest guidance, AVCs and value data.
These Q&As detail the questions asked by attendees and the answers given by the panel during the webinar.
Value data calculations
If any values have been calculated (or stored) in the past 13 months, are these returned immediately? Does this preclude using live calculations alongside those that are already stored? And would this be compliant?
Where the value has been generated for a statement provided to the member within the past 13 months, or is based on a calculation made within the past 12 months, the information must be returned immediately.
PDP service standards (which are contained in the code of connection) determine what ‘immediately’ means here.
Following consultation in 2022 on value data response times, the original proposal to set a response time of 2 seconds indicated that would preclude live calculations.
Post-consultation, PDP has therefore indicated we would amend this to 10 seconds in response to the consultation feedback, to make possible live calculations and return of up-to-date data.
If a scheme wants to provide a more up-to-date value, they should develop systems to do that immediately to make sure they are compliant.
Does the main pension provider or scheme always have to return the AVC data?
No, they do not. The system has been built to be reflective of how the pensions industry operates.
Many AVC providers will want to connect to the ecosystem directly, or via a third party and return data via a separate connection to the one used by the main scheme.
Some AVC providers will want to provide the AVC data to the main pension provider or scheme.
Irrespective of the setup, the pension provider or scheme should work with the AVC provider to ensure data for the AVCs are available on dashboards in a joined-up way.
The pension link, outlined in the data standards, was created to make it easier for providers to ensure their returns are linked up when displayed on a dashboard, even where there are multiple sources for those returns.
Prior to the main scheme’s connection to dashboards, will AVC policies be displayed without the corresponding occupational pension to which they relate?
As a consequence of the staging profile, many AVC providers may be connected to dashboards in advance of the main pension provider or scheme.
Until the main pension provider or scheme has been connected, the AVC provider should only make value returns to dashboards when the benefit is a free-standing AVC benefit, therefore not an investment on the part of the main scheme.
The AVC provider can also use the employer details, if these are held, to draw the user’s attention to information which can help the user understand how the AVC pension was built up.
Who is responsible for making AVC data available to members on dashboards?
Under the legislation, the main pension provider or scheme must ensure all elements of the benefits for which they are responsible are made available to their members via dashboards.
This includes where there is an AVC pension linked to the main pension.
To what extent have AVC providers, regulated by the FCA, engaged with PASA guidance across the industry?
PASA has an ongoing programme of work to engage with AVC providers, which is being supported by the appropriate regulatory bodies.
PASA will shortly be issuing guidance on preparing scheme AVC data and this will be followed by further guidance covering the engagement with AVC providers.
Given that the data will not be normalised, is there a concern of about how different ‘readers’ of the data will normalise it themselves?
It is important when making data available to the ecosystem to consider the saver perspective. Understanding the population and segmentation is important so that the correct warning codes are applied. It is also important to ensure that the data is formatted in a way that best represents the benefit to the member.
The PASA value guidance also suggests that, wherever possible, it can be helpful to make data available in a format that the member is already familiar with.
As the data will not be normalised, will data providers be asked to provide documentation on what they are providing and their business logic for it? It seems feasible that two data providers would provide data with the same label that would have been calculated in two different ways. As a data reader, how could you know and account for this?
For occupational private sector schemes, it is the duty of the trustees to connect to the ecosystem. As this will typically be delegated to a third party, in line with the PASA connection readiness guidance, the trustees should ask for evidence of the steps taken to connect. This evidence could include a data reconciliation detailing the data being provided and the logic.
At this stage, data providers do not know the final design of dashboards, and how the data will be presented. The focus needs to be on providing the information set out in the draft data standards and, for wherever appropriate, the ability to provide contextual data. This will be used to explain the benefits to the member.
If scheme trustees decide it is reasonable for AVC data to be displayed separately from the main scheme (“multiple sources not linked” in the PASA Guidance), do the benefit illustration dates still need to be aligned?
PASA’s understanding is that the Pensions Dashboard Regulations state the benefit illustrations for all benefits within a scheme must have the same benefit illustration date.
It is suggested there should be alignment of matching criteria between a main scheme and AVCs as an ‘opportunity’. Does the matching criteria of a main scheme and AVC have to be the same or can they be different?
This question applies where the multiple source method is used for sending data to the ecosystem. Legislation does not state that the matching criteria of the main scheme should be the same for AVCs.
However, administrators should be mindful of the impact if these criteria differ. For example, if the ISP for the main scheme returns a ‘match’ and the ISP of the AVC provider returns a ‘maybe match’, this might be confusing to the member.
The benefit illustration date must be the same.