Responses to questions from the DWP consultation webinars

This page provides answers to many of the questions that came up in our engagement with stakeholders during the first of a series of webinars led by the Department for Work and Pensions (DWP) during the consultation period. They are grouped into themes and are correct at the time of publication (February 2022).

Webinar 1: overview

Consultation

Will there be plenty of time to consider the DWP consultation alongside the FCA consultation? This is vitally important where both sets of proposals may apply to one organisation.

We have co-ordinated together to ensure there is sufficient overlap in the consultation periods. The FCA’s consultation was published on 11 February. The consultation runs until 8 April 2022.

The DWP consultation will be open for responses until 13 March 2022.

Additionally, the FRC published its consultation on revisions to Actuarial Standards: Technical Memorandum 1 on 14 February. This consultation runs until 6 May 2022 and is relevant to how respondents consider the value data requirements proposed by DWP and FCA.

Architecture / find and view

What proportion of find requests do you anticipate will result in partial matches?

This is not something we know yet. We will likely get some insight as testing progresses. Trustees and managers of occupational pension schemes have an obligation to maintain the quality of their data which will help ensure they can carry out effective matching.

If someone paid into a pension, but left that employment 20 years ago and the employer no longer exists, could the pension be traced through the dashboard?

Yes. This is one of the primary benefits we hope will be realised by pensions dashboards, i.e. that individuals will be able to be reunited with lost pensions.

What limitations are there to be placed on an individual over the number of times a search may be instigated in a time period and how will this be implemented?

We do not propose to place any limit on the number of searches that can be carried out by an individual. However, schemes will not need to provide new values where they have previously calculated these within the last 12 months. One of the benefits of using Pensions Identifier (PeI) tokens is that they can be reused so schemes can quickly retrieve the same information again if an individual returns to use a dashboard again and reduces the need for further searches (especially when an individual has been reunited with all their pensions). We also believe that ultimately, schemes will move towards the automation and digital storage (for ease of retrieval) of view data to ensure quick and accurate responses.

Once a Pensions Identifier token (PeI) has been allocated, does it remain permanently as an ID for that benefit and would it follow if a scheme changes administrator before the member retires?

A registered PeI confirms an individual has a benefit with that scheme. This doesn’t change if there is a change in administrator or endpoint. (Note this latter point is contrary to what was said during the live Q&A session in Webinar 1, which was incorrect.)

Will the dashboard be able to show if a benefit transferred? An example could be that a member expects to see five pensions perhaps forgetting that one transferred into another so they only now have four providers?

No pensions information will be held centrally by the dashboard digital architecture, so dashboards should show a transferred benefit once the schemes involved update their records. The data standards do not include a flag for whether the benefit was previously held elsewhere and transferred to a new provider. Dashboards will, however, show provider contact details, so a saver can contact them if they have any questions.

Would Trustees be expected to identify in real time leavers and the changes in the view values that would entail? In particular for non-money purchase members.

Yes. There is a proposed requirement in the draft Regulations for PeI tokens to be de-registered when an individual leaves a scheme – see draft Regulation 22(6).

How long will the exemption (3 or 10 days for responding to view requests) apply for? Is it just for the settling in period?

As this is a digital service, we know that individuals using dashboards will expect to receive information quickly. The 3 and 10 day limits proposed in regulation 25(5)(b) are intended to be seen as a starting point, and we are keen to move towards a more immediate requirement in the future. The limits are set out in the proposed regulations and any changes to them would require further regulations, which would include consultation and approval by Parliament.

Does the 10-day time limit for returning value information for non-money purchase schemes suggest you’re thinking the provider will have work to do to produce those figures, in the same way as if the member had requested this information directly from the provider? Providers have contractual activity assumptions built into contracts with clients, but it seems like Dashboards will be outside these assumptions and will still be generating work for the provider.

Scheme trustees and managers will need to liaise with their administrators to consider to what extent contracts need to be varied to be able to help the scheme meet their new dashboard obligations.

Data

Will there be facility to provide contact details of the scheme administrator to the member along with their projections i.e. where to go to get more information?

Yes, this is one of the requirements which we have proposed in the draft Regulations – see regulation 23(1)(b).

Are you looking at revalued to current date and projected to normal retirement age only or is this also early and late retirement projections?

In part 1 of schedule 3, we have proposed that accrued values should be valued to the illustration date or reflect amounts built up so far; and projected values should be projected to Normal Retirement Date. In this first phase of dashboards, we are not seeking to include the facility to provide alternative retirement projections or modelling.

Does a member need to have been in their scheme for a minimum period of time to receive a projection?

Regulation 23(3) as drafted requires administrative data to be returned within 3 months of an individual joining the scheme. We propose that this requirement is matched for value data and are keen to hear views on this in the consultation responses.

Some Defined Benefit schemes have complex benefit structures with multiple normal retirement ages (NRAs) requiring late and early retirement factors. Will there be further guidance on the treatment of these and at which NRA the projection should be calculated to? Also, what data should be returned for members who are past their highest NRA?

These are the type of cases that we want stakeholders to tell us about in their consultation responses –including a reflection of what the current approach is to dealing with such cases in annual statements or statements on request. The PDP is also aware of the issue, and will cover it in the Data Usage guidance it will publish to support its Data Standards.

Could dashboards be used (by schemes/administrators) to cleanse data by getting member feedback?

Yes, we expect dashboards will provide a good opportunity for this. When you return a partial match, savers will be able to contact schemes and use the opportunity to update their data. Schemes can also use any noted data discrepancies as a spur to contact their members to check and verify existing data.

Data quality is clearly key but there isn’t really a data standard for schemes transitioning to new administrators. How will you ensure outgoing administrators provide new administrators with data that is dashboard ready?

It is the responsibility of scheme trustees and managers to have controls and processes in place to maintain data that is appropriate for the running of their scheme, and this includes ensuring that an administrator transfer doesn’t negatively impact the data. Trustees and managers should look carefully at all the terms, including exit clauses, when negotiating contracts, and work with outgoing and new administrators to effect a smooth transition. The PASA Code of Conduct on Administration Provider Transfers sets out best practice for ceding and newly appointed administrators in relation to administrator transfers.

If someone had left the employer / scheme, but the deferred pension had not been calculated, should the scheme provide view data? How would it do that if the benefit hasn’t been calculated?

Yes, view data should be provided. If value data has not been calculated before, then, as set out in regulation 25(5)(b), a non-money purchase scheme would have 10 days to calculate and return it.

What are the value requirements for deferred members of non-money purchase schemes?

For deferred members of non-money purchase schemes, we propose in Schedule 3 (part 1, para (2)(1)(b)) that schemes return an accrued value which is valued to the illustration date, in accordance with the scheme rules,
The illustration date is the date by reference to which the value data provided to an individual relates, whether that be for a statement produced within the last 12 months, or a calculation performed in the last 12 months, as per regulation 25(3).
We recognise that this value is one where a range of approaches are taken, so are keen to hear views in the consultation.

How will Additional Voluntary Contributions with an external provider fit into the process for Defined Benefit schemes?

This is an issue which the PDP has been engaging on with industry through their data working group and will be picking up in their data standards and guidance.

Connection and staging

Will schemes be advised individually of their staging dates?

Trustees or managers of occupational pension schemes will be able to determine their proposed staging deadline from the staging profile, set out in Schedule 2 of the Regulations when these are finalised. Trustees or managers of hybrid schemes should also refer to draft Regulation 15. The Pensions Regulator are planning to carry out a communications drive to educate trustees or managers on their responsibilities and are hoping to be able to tell schemes when it believes their staging deadline will be based on the information TPR hold. It is therefore particularly important that trustees and scheme managers ensure that data provided in the scheme return is up to date and accurate.

If an individual was in a scheme with fewer than 100 members and the scheme does not choose to stage – how will that individual get a full view of all their pensions, or even know they have an additional benefit which is not shown on the dashboard?

Design standards for qualifying pensions dashboard services would mean that individuals accessing dashboards are presented with appropriate information to ensure they are advised of possible gaps in their pension information. We do intend, subject to consultation, to regulate for the inclusion of small and micro schemes in dashboards at a later date.

Will PDP provide the facility for scheme providers to enhance their data quality prior to staging, or will the onus be on the provider to meet data quality standards in advance?

Trustees and managers have existing obligations to maintain data quality and they should start to prepare for dashboards in this way now.

Is there a risk that delays in Trusts giving their consent for their schemes’ data to be provided to the dashboard might prevent a data provider from issuing that data according to the Staging Schedule?

It will be the responsibility of trustees or manages of schemes to ensure that schemes connect to the digital architecture on or before their staging deadline, as per Regulation 14 and Schedule 2 of the draft regulations (or Regulation 18 in the case of new schemes), and are in a position to respond to find and view requests in accordance with the regulations. The legislation provides a legal basis for processing and responding to find and view requests.

What tools will trustees have to force their providers (e.g. legacy additional voluntary contributions provider or buy-in insurers undertaking administration) to help them get ready by the staging deadlines? Experience shows that it’s not always easy to get engagement.

Contracts with administrators are the responsibility of scheme trustees and managers. Guidance will be made available to assist schemes with the connection process.

Compliance

If a value cannot be returned, who is liable for a potential fine – the system provider or the administrator/trustees (e.g. if calculations are not automated; or if they are but they cannot be got out of the system to be provided to the individual)?

Trustees and managers of occupational pension schemes would be responsible for ensuring the requirements in the Regulations are met. We have also proposed, however, that the Pensions Regulator will have the discretion to issue third party compliance and penalty notices if it is of the view that another party has caused a breach, as per draft Regulation 29.

Who will be responsible for providing data for an orphan scheme that has no employer and no trustees?

The proposed Regulations would put requirements on trustees and managers of occupational pension schemes. The issue of orphan schemes is a wider issue but the Pensions Regulator will seek to speak to providers to understand the art of the possible in terms of making benefits in orphan schemes available to the dashboards.

Will there be any penalties on schemes if they are unable to meet response times to provide value info to members?

A failure to provide data within the response times would constitute a breach. As per Part 4 of the draft regulations, the Pensions Regulator would have the discretion (among other options) to issue penalties if trustees or managers fail to meet any of their obligations under Part 3 of the proposed Regulations and would exercise its discretion in a proportionate, consistent, targeted, and transparent way. The Pensions Regulator expects to consult on its compliance and enforcement policy for dashboards later this year, but we expect the Regulator will take a dim view of any wilful non-compliance.

If an individual accessed data by providing false information to the identity service, would schemes be liable for any data protection breaches?

Schemes are required under these proposed regulations to attempt to make a match in their records with the individual making the search; and they should be able to do so based on the ID verified by the identity service. Our view is that liability for any data protection breach is likely to rest with the organisation responsible for the breach, but any decisions on UK GDPR compliance rest with the ICO.

The liability model allows a complaint to be made directly to the supplier where an individual considers the supplier hasn’t adequately provided its dashboard service. They may also make a complaint to the ICO.

Qualifying pensions dashboard services and consumer protection

Will Pension Tracing Services be able to manage the process on behalf of dashboard users?

The draft Regulations only allow for a dashboard to offer delegated access to MaPS Guiders and regulated financial advisers that have the relevant permission to provide advice on pensions. This ensures that the delegate function is delivered by appropriate people to offer pensions guidance or advice. The draft Regulations would also allow delegated access to be provided to other people that MaPS consider appropriate, which would allow further groups to be added, as testing builds an understanding of the needs of dashboard users.

Will flags be included to highlight the importance of tax and the potential impact on benefits of future pension withdrawal decisions?

Financial transactions will not be able to take place on pensions dashboards which reduces the risk of any impulsive withdrawal decisions. Appropriate messaging on dashboards will be set out in design standards and will be informed by user testing.

Presumably messaging will highlight that DB projections are just that and could change given schemes may amend future service benefits.

Yes, design standards will require dashboards to present and explain the illustrative nature of forecasts.

Can an individual access more than one QPDS out of choice or are they directed to just one?

Individuals would be able to find and view their pensions information from as many dashboards as they choose. Qualifying dashboard services may be hosted by a range of different organisations including, for example, one the individual is already familiar with, such as a known pension provider, or their bank. Individuals will be able to choose to use the dashboard service that suits them best.

How will members provide consent to their data being used for dashboard purposes? Would passive consent be allowed, where a general announcement tells members about dashboards and allows them to opt out?

An individual’s data would only be used if they request their information via a dashboard and they would need to provide their affirmative and informed consent as part of that process.

How many QDPS are you expecting there to be as I assume all pension providers will have to connect to all of these at any time?

Pensions schemes will only need to connect once to the central digital architecture so it should not be any more onerous to respond to requests from multiple dashboard providers. The Pensions Dashboards Programme is currently working with three potential dashboard providers as part of testing the digital architecture and we are keen to gauge the level of interest in providing a dashboard service from consultation responses.

Webinar 2: QPDS and consumer protection

Staging / connection

If you do bring in the smaller schemes in future how small are you likely to go? Are you likely to exclude the very small schemes such as one-person? There are around 27,000 small and micro schemes (including relevant small schemes and executive pension plans), but they represent only a quarter of one per cent of all active and deferred memberships.

The regulations do allow for small schemes to connect early on a voluntary basis We have not developed proposals for small and micro schemes at this stage, but if we were to do so, we would consult at the relevant time. Our ambition is for dashboards to be as complete as possible, but we recognise there may be exceptions. Non-registrable schemes (such as one person schemes) will not be permitted to connect to the dashboards to ensure that TPR is able to regulate effectively.

Which organisations will have the power to set and enforce standards for Integrated Service Providers which will be storing pensions data?

In Part 3, Chapter 2, of the draft Pensions Dashboard Regulations, we place requirements on the trustees or managers of occupational schemes, and it is they who remain accountable. Similarly, an FCA regulated pension provider remains responsible and accountable for being operationally resilient and for meeting the regulatory requirements that it is using the ISP to satisfy.

Data protection legislation requires trustees or managers to put in place a written contract where they use a third-party processor. If TPR believes non-compliance has been caused by another person, they do have the option to issue a third-party compliance notice.

Once a scheme has connected to the dashboard and we pass the dashboard availability point, will schemes be able to fulfil certain aspects of their current disclosure obligations via the dashboard and not have to separately, for example, respond to requests from members for benefit statements?

A request for information via the dashboard is separate to existing requirements on pension schemes to issue benefit statements. Responding to a dashboard request does not replace or fulfil a scheme’s obligation to provide a benefit statement to a member and this should be provided in the usual way.

For scheme members who have breached their Annual Allowance or Lifetime Allowance and are using voluntary scheme payments to meet this breach, will the dashboard be able to account for this in real time, acknowledging the ability to use past underuse of Annual Allowance to reduce any breach?

Dashboards will present values as calculated by schemes, and the extent to which they are in real time would reflect the frequency at which schemes elect to provide new calculations (within the parameters proposed in the draft regulations). Where deductions have been made, trustees or managers will need to follow scheme rules or AS TM1, as relevant, to determine how to reflect the deduction in those calculations

What will the main differences be between the requirements for occupational pension schemes and the requirements for personal pension schemes?

The principal difference will be the deadline for connection. Otherwise, the requirements are broadly the same: both occupational pension schemes and personal and stakeholder pension schemes must search records, find pensions, calculate values and return the data.

Requirements on personal pension schemes will be outlined in FCA rules.

Architecture / find and view

Why not prevent searches until the consent and verification is achieved rather than requiring the provider to check the identity and authorisation has been provided?

The individual must verify their ID and provide consent before a Find request is issued by MaPS to the pension provider.

How does the Find service process-flow work once the member has already registered and has a PeI when they revisit the dashboard, say a year later?

Where a QPDS offers the individual the ability to store the PeI, it removes the need for an individual to go through the ‘find’ step again to view the data for a previously matched pension. This is because the stored PeI enables the QPDS to make a direct call to the scheme for the information.

All PeIs will be stored by the central digital architecture period (18 months is our current working assumption but it could be extended with the individual’s refreshed consent).

What will happen when only a partial match of find data is made?

An error message will be returned to the individual’s dashboard by the pension scheme requesting that the user contact the scheme directly to see whether they can provide the further information the scheme needs for a full match.

Will pension schemes be able to put their own caveats against figures that they’ve supplied?

The MaPS standards include a pre-defined set of warnings to accompany the accrued and projected values. The intent of this warning field is to highlight any significant reason that the data provider wants to display, to avoid misleading the individual. It is not intended to cover every scheme-specific nuance. It will be a constrained set of the most common major factors that affect the value being displayed. The current list of codes will be validated and extended through alpha and beta phase and user feedback. We would welcome feedback on the warnings for which codes should be made available. We are also exploring a limited free text function for the pension scheme to be able to communicate a short, bespoke message back.

If MaPS do not need to be authorised by the FCA to become a dashboard provider, since the Pension Schemes Act requires them to host one, would they be subject to the same rules as QPDS? Who will have oversight of the MaPS dashboard?

MaPS is subject to the oversight of the DWP as well as the Parliamentary and Health Service Ombudsmen (PHSO). We anticipate that the MaPS dashboard will follow the same rules as QPDSs unless there’s a good public policy reason not to.

Will ID providers return the verified details (Name, address, DOB), saving consumers from having to enter those details, or will they just confirm the details entered are correct?

We are working on the assumption that users will confirm these verified details returned by the identity service before the Find search is sent.

How will the access to and presentation of data on dashboards account for “vulnerable” members.

As a digital service, we hope that dashboards will improve access to information about pensions, but we are keen to ensure that approaches to accessibility and presentation of data take into account those who may be vulnerable or have specific needs. For QPDS and the MaPS dashboard, user testing – as well as ongoing evaluation – will be important in understanding how design standards can be shaped to ensure that presentation and accessibility accounts for the needs of vulnerable users. It is particularly important that values are presented in a way which is understandable and includes the right warnings and messages; and that the overall presentation of dashboards does not risk misleading users.

Display and functionality

Will a QPDS be able to provide an initial simpler summary before people are shown the compliant “full fat” display?

This is one of the design decisions subject to user testing for the design standards.

There are good reasons to control the display of view data. What steps are being taken to balance this control with the potential for best practice to emerge via competition if QPDSs have flexibility in this area?

Design standards are aimed at producing a consistently high level of consumer protection across all QPDS. However, we do also want QPDS to be capable of evolving to reflect user experience therefore a degree of flexibility is needed and not stymie best practice emerging. This is precisely the balance design standards should strike.

Can I check understanding please? A QPDS provider is a Dashboard provider only and not a Data Provider I.e., this only applies to an organisation developing and hosting a Dashboard User Interface?

Yes. When we refer to a QPDS it is only as a dashboard provider but if a QPDS is also a pension provider, in its capacity as such its pension scheme manager/trustee may also have requirements to connect and provide data.

I note that the State can say that certain state pension information is not currently available. That doesn’t seem to be an option for pension schemes. Is there a reason why the State pension should be treated differently?

This is not the case. Regulation 25(6) of the draft Pensions Dashboard Regulations states, if a pension scheme has a good reason not to return a value on request from the individual, the scheme must explain to the individual why that value isn’t available.

As DWP says in the consultation document (page 34), all pension income figures shown will be merely indicative. To prevent users feeling a false sense of accuracy, and for consistency, presumably the PDP Design Standards will require all QPDSs to display all pension income figures, including DB and State, in whole pounds and rounded down to just a few significant figures as DC SMPI pension incomes already are?

This is our current thinking. However, it is one of the design decisions which will be subject to user testing.

Whole pound, rounded down, income figures will really help users understand that all figures they’re seeing are indicative and should therefore not be relied upon for any decision-making. In the PDP user research and testing done so far, how effectively did users get this crucial point? To what extent did users’ understanding of, and importantly reaction to, the fact that all figures will be indicative vary across different segments of the user population (e.g., across different ages, different mixes of pensions held, different levels of pensions knowledge, etc.)?

This is a crucial issue to get right, to ensure the individual understands the limitations of the values being presented and this, alongside the messaging, will be subject to extensive user testing before being included in design standards.

By when will all the Standards be confirmed?

The Pensions Dashboard Programme is working towards a July consultation and anticipate the standards to be finalised in October in line with the current DWP regulation timetable.

Will the design standards include the use of a pension providers logo alongside the data provided? Reason for asking is we are going through a re-brand so want to know if a logo is going to be displayed and if so, how this will be kept up to date if/when this changes

This is currently being explored by MaPS.

Can dashboards contain adverts?

Whether/in what circumstances QPDS operators will be permitted to show financial promotions alongside dashboards is a matter for the FCA to consider when developing the regulatory framework for QPDS operators.

Will trustees / managers / QPDS be required to vet consents for delegates etc?

No. The central digital architecture will be gathering the consents of both the individual and any delegates.

Who will be responsible for deciding which delegate will be able to access, subject to individual approval?

We are proposing in the regulations (Regulation 7(8)) that individuals will be able to delegate access to:
1. MaPS Guiders
2. A person with permission to advise on investments as referred to in article 53(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001
3. A person with permission to advise on the conversion or transfer of pension benefits or
4. Another person who MaPS considers appropriate. This will allow further groups to be added, as testing builds an understanding the needs of dashboard users.

Could you have a link to execution functionality from a QPDS to some other area of a firm’s website?

The FCA will consult on a regulatory framework for operators of QPDSs later this year.

You stated that allowing data exports on dashboards “May increase the risk” – is more research being done on this, we should ensure that mitigations are proportionate to the risk, and it seems that the risk is hypothetical at the moment

Our consultation seeks views on data export and the potential mitigations we have suggested. We will share the responses with the FCA to support its consideration of the regulatory framework for QPDS providers.

Regarding temporary storage of data – how long will this be?

While it will be possible for dashboard providers to store PeIs, they will not be able to store the ‘view data’ shown to individuals on dashboard. It is up to the dashboard provider whether they offer the ability to store PeI’s, it is not a requirement that all dashboards must do this.

View data is only available whilst the user is in session – temporary storage (or caching) is permitted to facilitate it.

Given the comments about dashboards not allowing transactions will there be a general health warning about numbers etc and links out to MoneyHelper or seeking advice etc on the MaPS dashboard?

Yes, we anticipate, subject to consultation, that design standards will require dashboards to provide messaging to individuals about the values returned and signpost individuals to advice on both the MaPS dashboard and a QPDS. The messaging will be informed by user testing.

If there is a power of attorney in place (i.e., for a vulnerable member) will that attorney be able to access that person’s pension data?

Apart from the delegates specified in Regulation 7(8) of the draft Pensions Dashboards Regulations, the dashboard service we are currently developing requires the person who wants to search for their pension to prove their own identity before they can use the service. Widening this out to those with power of attorney might be an option we could explore in future.

Will executors be able to use dashboards to trace a deceased person’s pensions?

Apart from MaPs guiders and IFAs (Independent Financial Advisor), the dashboard service we are currently developing requires the person who wants to search for their pension to prove their own identity before they can use the service. Widening this out to executors might be an option we could explore in future.

Oversight and consumer protection

Will there be any pension training available enabling users to better understand pension data and effectively use the pensions dashboards when making informed choices for retirement?

Design standards will detail how a dashboard service should present pensions information to enable users to better understand that information. Pension guidance is available from MaPs and we expect there to be signposts towards this guidance on dashboards for users to access.

What sort of organisation do you see fulfilling the role of third-party auditor? Is there capacity in the market? And why is the FCA not going to be the auditor?

We envisage that the auditor will be a professional who is independent from the dashboard provider. We are keen to hear views on this approach and we have asked for views on this in the consultation.

FCA audit would not be appropriate as the standards are set by MaPS, and adherence to them is required by DWP regulations.
The FCA will, however, supervise and enforce against the rules that it will set for the operators of QPDS. The FCA will consult on these rules later this year.

Can the QPDS and the MaPS dashboard be accessed from overseas?

Yes, there is no territorial limit for using either dashboard, but the individual will not be able to use their chosen dashboard to find and view pension schemes which have their main administration outside of the United Kingdom.

What are the benefits of a pension provider becoming a QPDS over just referring customers to the MaPS dashboard?

Whether to offer a QPDS service as part of a pension provider’s offering will be a commercial decision for the pension provider.

Will the journey for receiving FCA authorisation for operating a QPDS be the same for occupational pension arrangements and those providers already FCA authorised?

A firm that is not already authorised but wants to operate a pensions dashboard will need to obtain FCA authorisation and the new permission as stated in Regulation 7(4) of the draft Pensions Dashboard Regulations. If they are already authorised, they will need to obtain the new regulatory permission. All will be subject to the requirements on which the FCA will consult later this year.

In order to cover the costs of regulations will QPDSs have to pay in some way?

There is an application fee for FCA authorisation. Once authorised, firms with the permission to operate a QPDS will be subject to periodic FCA fees.

A QPDS could be an independent dashboards provider as well as pension provider. How would conflict of interest be managed in this instance? Would there be measures in place to ensure self-interest doesn’t overtake customer interests?

All FCA authorised entities are subject to the FCA’s principles for businesses, which include the obligation on firms to:
• pay due regard to the interests of its customers and treat them fairly; and
• manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.

The FCA will consult on its regulatory framework for QPDS operators later this year.

An organisations duty as a scheme and a QPDS are defined in both regulations and standards, so they must adhere to both.

FCA approval – if a company already has FCA approval – does it matter what the approval is for?

Anyone who wants to operate a QPDS will need to obtain the new regulatory permission – stated in draft Regulation 7(4) – even if they are already authorised and have permission for other regulated activities.

Will there be a limit to the number of QPDS providers allowed? How many companies have shown an interest to date?

We are looking for healthy interest and a vibrant new service. At the moment we are not envisaging a limit to the number of QPDS providers allowed.

Webinar 3: The pensions industry – getting ready for dashboards

Consultation and general

Where are the consultation webinars and slides available to re-watch?

You can view recordings and slides on the information for the DWP consultation page.

Where can the definition of acronyms be found?

There is a glossary in Annex D of the consultation document and PDP has also published a glossary of commonly used terms.

The DWP’s consultation period is very short, particularly for such a detailed and important topic. Is there any chance the period might be extended? We have the FCA consultation, PDP standards/guides/examples, and FRC’s AS TM1 to consider as well.

DWP have carefully considered how long the consultation should be kept open and consider the 6-week period to be appropriate and fair.

Architecture / find and view process / matching

Could a scheme return a link to their own website instead of those individual URLs?

Draft Regulation 24 sets out that “trustees or managers must, immediately after a view request is received, provide a website address to locations where signpost data can be accessed.” If the relevant information can be found on the schemes own website, then URLs to the relevant location can be provided.

Will state pension factor in COPE? It should give a balanced view of available benefits.

Yes, the State Pension estimates will have factored in any contracted-out deductions that need to be applied. We are not however planning to show the Contracted-Out Pension Equivalent (COPE) amount separately.

Will dashboards send pension schemes a daily list of membership details to check, via a scheme finder portal, rather than pension schemes providing the information to dashboards?

Find requests will be sent from the individual’s chosen dashboard to pension schemes on a real-time basis only when the individual makes a find request. If a scheme has a match, it should return a Pension Identifier (PeI) token to the requesting dashboard.

Data requirements – general: find, admin and signpost data

Will s32 policies/deferred annuities and group personal pensions be regulated by FCA or TPR?

Schemes that fall within the definition of a personal pension scheme are subject to the proposed FCA rules.

Are members with accumulation and crystallised benefits in the same scheme excluded?

Our proposed intent is that individuals captured under the Pensions Act 1995 definition of a pensioner member are out of scope of dashboards. This includes pensions where the tax-free lump sum has been taken, and money purchase pensions which have been annuitised or are in drawdown, including partial drawdown.

Data requirements – accrued and projected values

The draft Regulations suggest that projected values need to be provided as at normal pension age. What should be provided if the member is already over normal pension age?

We do want schemes to provide a value and our expectation would be that this would be based on the individual retiring ‘now’ or at the illustration date. But we are keen to understand how schemes currently approach this issue when they issue statements.

Why can’t it be based upon the individuals preferred retirement date? (some will want to retire at 55, others at 63, etc)

The proposals are designed to strike the right balance between delivering an ambitious and successful dashboards service for individuals, whilst acknowledging the demands placed on schemes. Similarly, we think that, in this first phase of dashboards, it is important to engender trust and understanding of the values shown. Simplicity, and a consistent approach to retirement date is part of this – but we welcome views on this in response to the consultation.

If you want simplicity, the Regulations shouldn’t use the term ‘normal pension age’.

The proposals are designed to strike the right balance between delivering an ambitious and successful dashboards service for individuals, whilst acknowledging the demands placed on schemes. Similarly, we think that, in this first phase of dashboards, it is important to engender trust and understanding of the values shown. Simplicity, and a consistent approach to retirement date is part of this – but we welcome views on this in response to the consultation.

How can projected values be provided where members are not expected to remain in that employment until their normal pension age?

This is a risk of course, but in the name of simplicity, it is difficult to deliver an alternative, without removing projections altogether, which we think are important. However, we will need to ensure, through user testing, that any values are accompanied with appropriate messages on assumptions and caveats as well as other necessary explanations.

Trustees know their schemes best and how to best illustrate projected benefit values under the framework – and many schemes are complex. Why are the draft Regulations so prescriptive? Would it be sensible to allow trustees to depart from the framework to give a sensible answer to members?

The proposals are designed to strike the right balance between delivering an ambitious and successful dashboards service for individuals, whilst acknowledging the demands placed on schemes. We are keen to find an approach which provides enough flexibility for schemes to deliver calculations in the way most appropriate to their scheme and members but retains enough control so that values are consistent and comparable across different schemes and scheme types. We welcome views in response to the consultation as to the extent to which that ambition has been achieved.

The SMPI currently has an exemption for members within 2 years of Scheme Retirement Age (SRA). Will we be required to provide Estimated Retirement Income (ERI) if within 2 years of SRA as the AS TM1 implies that will be the case? Also, AS TM1 says we are to assume no tax-free cash at retirement because that is what Pension Dashboards want to do. Is that correct and why?

Schemes will not be required to provide projection information to members within two years of scheme retirement age, but, Schedule 3, Part 2 of the Regulations includes provision to allow schemes to provide this information to those members if they wish to. ASTM1 says to assume no tax-free cash. This is to provide an element of standardisation to aid simplicity and understanding, but of course, both DWP and the Financial Reporting Council (FRC) are keen to hear views on this.

Are there any plans to develop a “TM1” type approach for schemes to leverage for providing ERIs for Defined Benefit (DB) schemes? If not, there is a risk that schemes will use very different assumptions which will not provide users of dashboards with a good understanding of their likely income in retirement.

Our proposals are designed to provide for a consistent approach in calculating projections to simplify the methodology used while striving to deliver a successful dashboards service. We welcome views on specific proposals in response to the consultation.

Non-money purchase schemes would follow scheme rules when projecting values for active members, assuming that the member continues in pensionable service and continues to build up benefits until normal pension age and assuming no increase in the individual’s salary.

We invite views on alternative approaches.

With Pension Freedoms, draw-down has been the preferred choice for contract-based schemes; projected pot value is more of a necessity than a nice to have.

Our proposed Regulations point to AS TM1 to support the calculation of values, and the FRC are consulting on changes to this. Both DWP and the FRC welcome views on whether the approach proposed on conversion of pot to income is the right one.
We would also be keen to understand from the consultation about the projected pot value, which, given that it is not a requirement in Disclosure Regulations, we have proposed as ‘provide if held’.

The 12-month limit assumes that annual benefit statements are produced on the same day each year. In reality, there could be a gap of up to 17 months.

We are interested in hearing more about these scenarios in responses to the consultation to inform our regulatory approach.

If a benefit statement has been provided within the last 12 months but a member’s status changes i.e., they become a deferred member, what values should be returned. Would it still be the values based on the now out of date statement?

Our expectation is that schemes should provide values based on the current status – so in this case, it would be on the basis of being a deferred member. But we are keen to understand the issues around of these more specific scenarios in the consultation.

Most DB schemes don’t produce deferred member benefit statements at present because of the cost involved. Was this factored in?

Yes, this was considered in the development of the staging model and is one of the reasons why non-money purchase (DB) schemes are required to stage later than most money purchase (DC) schemes. A regulatory impact assessment will be published alongside the draft Regulations when they are laid in parliament.

The policy sets out that the accrued annualised pot should exclude future premiums and fund growth, but could the policy include future inflation and charges?

Our approach on annualised accrued values is to use the methodology set out in AS TM1, minus future contributions and fund growth. Our anticipation is that future inflation and charges would not be included, and we will look at (pending the outcomes of this consultation) whether that needs to be clarified in the Regulations. The FRC is also consulting on AS TM1 and will be keen to hear views on this.

What is meant by ‘immediately’?

It means ‘straight away’ – essentially this would be an automated process designed to process and return information quickly to ensure a positive experience for the user.

Is there good reason why there is no relaxation for value data for new members? This will be more difficult to provide initially, especially for DB schemes.

Regulation 23(3) as drafted requires administrative data to be returned within 3 months of an individual joining the scheme. Respondents of the consultation can provide views on what they consider would be a reasonable timeframe for trustees/managers to begin providing value data to new members on dashboards.

Does the policy give schemes 3 months within which to provide data on new members?

The 3-month requirement for new members relates to administrative data only (i.e. pension scheme data, administrator data and employment data).

Non money purchase schemes in the draft Regulations are DB only. As drafted, DB schemes with Defined Contribution (DC) Additional Voluntary Contributions (AVCs) or hybrid schemes with separate DC and DB benefits would need to return all value data (including in respect of DB benefits) within 3 days – is this the policy intent?

The intention is that all benefits should be returned as soon as possible, but the legislation (Regulation 25(5)) provides additional time where new calculations are required – 3 days for DC benefits and 10 days for DB benefits or hybrids where a DB calculation is involved. We would be grateful for views about whether the Regulations achieve this.

Bearing in mind the 10-day response time, how is it envisaged administrators be informed when users receive a message to say a match has been made but pension figures are currently unavailable? It’s likely we’ll have to obtain data from employers and/or calculate benefits within that 10 days.

Scheme trustees and managers will be responsible for responding to requests to view pensions information and will need to carefully consider any contracts they have with administrators to ensure they are able to fulfil these requirements.

Information provided in response to a dashboard request could be incorrect. Illustrations issued directly to members by schemes are appropriately reviewed and caveated. How will this be dealt with in a dashboard environment?

Schemes should follow the requirements set out in Regulations, following AS TM1 or their scheme rules, as appropriate.

Standards published by MaPS will ensure that the appropriate messaging is provided alongside value data.

Is it possible to see the feedback from consumers that has led to the decision to provide the ERI values being discussed?

And does it show that customers are not concerned about seeing tax-free cash?

This is a decision which has been taken to aid simplicity and consistency on dashboards, but we are keen to understand whether other approaches could be more appropriate.

Would it be possible to see what a pensions dashboard would look like from a user perspective? Have any mock-ups been published?

Design standards for dashboard interfaces remain subject to user testing.

Connecting and staging

Why has the Pension Protection Fund (PPF) been left out of the dashboard? It delivers pension compensation for many people.

Part 4 of the Pension Schemes Act 2021 makes provision in respect of information from “pension schemes” to dashboards. Where a scheme has entered the Pension Protection Fund (PPF), it is no longer a “pension scheme” and therefore outside the scope of “pension schemes” in part 4 of the PSA 2021. We are currently working to consider options in this area.

Do ‘permitted delays’ to staging include schemes transferring to buy out with an insurer?

We would welcome views from respondents to the consultation. The draft Regulations would only permit a request to defer a connection date in specific circumstances where a scheme is changing administrator. As part of the consultation, we have asked if there are other circumstances in which trustees or managers should be permitted to apply to defer their connection date to ensure they have a reasonable chance to comply with the requirements in the Regulations.

When can we expect the Integrated Service Provider (ISP) market to develop? The procurement of an ISP will be an important business decision for many schemes.

The Pensions Dashboards Programme is actively engaging with firms entering (or planning to enter) the Integrated Service Provider (ISP) market and involving them in plans for early testing. We expect the ISP market to develop and mature over time to service the full range of schemes seeking this type of solution and we will monitor this very closely.

Do you have any concerns about ISPs aggregating and storing personal information in searchable formats e.g. to support fuzzy matching of find requests?

All participants in the dashboards ecosystem will be required to abide by existing data protection legislation, including UK GDPR. Trustees or managers of schemes remain accountable for compliance with the Regulations and to meet their duties in a way that accords with UK data protection and pensions legislation. Schemes would need to put in place a written contract where they use a third-party processor, which must cover matters including the security of processing.

What’s the latest Dashboard Available Point (DAP) thinking, including acceptance criteria for the DAP? When are dashboards expected to go live to the public (other than as a beta test)?

The point at which dashboards are launched publicly is what the PDP has termed the ‘Dashboards Available Point.’ Given the scale of the task of connecting so many pension schemes, a dashboard service could be made available to the public before the staging of all schemes is completed.

We intend to make dashboards available to the public when we can be confident that, for a critical mass of users, their various pensions schemes, and their State Pension, will all be findable on the dashboards service.

The DAP will also be subject to thorough, ongoing scale and operational testing of the end-to-end service with live data in a controlled environment.

Where a member is drawing only some of their benefits from a scheme (e.g. taking DB benefits as a pension but still contributing to a DC section of the same scheme), are they a “pensioner” for all benefits, or should they still be treated as an active member for the benefits they are still building up (in this case, their DC benefits) and for working out a scheme’s staging date?

Draft Regulation 15 deals with Hybrid schemes. For the purposes of working out the staging date, as per Regulation 15(1)(a), you should include any relevant (active and deferred) members in each section. So, in the example provided, they would count as a relevant member in the DC section, which should be taken into account for working out the staging deadline as per Schedule 2 of the draft Regulations. They would not count as a relevant member in working out the size (and therefore cohort) for the DB section.

The North Yorkshire Police Pension scheme and the North Yorkshire Fire Pension Scheme are included in the public pension scheme – April 2024. Both do not have membership of more than 1000. For example, as the Chief Constable is the Scheme Manager – if you just used size, it should be staged at the end of the process?

We have taken the view that it makes sense for all fire and police pension schemes to stage at the same time i.e. one staging date for the whole of these schemes, as per Schedule 2 of the draft Regulations. However, as set out at page 91 of the consultation (para. 75), we are considering what further mitigations may be needed to ensure the successful staging of PSPS, in line with our staging principles.

How do you define “the equivalent 2020/21 cohort” for a scheme growing bigger than 100 members? The numbers could be changing day by day. Given there are no staging dates for schemes with under 100 members at the reference date – at what date is a growing scheme’s membership measured for the purpose of working out the staging date for the equivalent 2020/21 cohort [reg 18(1)(b)].

The staging deadline is based on scheme year end data as supplied to TPR in the annual scheme data return. As defined in Schedule 1 of the draft Regulations, the size reference to use is based on scheme year end data, which is provided annually, not daily. If a scheme comes into scope in years following the reference date (i.e. the return data for the scheme year end between 1 April 2020 and 31 March 2021) the Regulations for new schemes apply.

Wouldn’t it be simpler to stage hybrids by reference to their total actives and deferreds, rather than what you are proposing in the Regulations?

We’re happy to hear views on alternative approaches but we believe this approach serves the interests of the members by prioritising whichever is the earliest section (as per draft Regulation 15).

When will hybrid schemes be expected to stage?

As per draft Regulation 15, staging duties will apply to both sections of hybrid schemes at the same time. Schemes will need to determine the earlier staging date of the two sections which will become the staging date for the scheme as a whole. Hybrid schemes should look at the equivalent staging date for each section and the earliest date effectively is the staging date for the whole scheme.

Can schemes that have already started winding up before 2022 be allowed to stage at the end of the sequence of 1,000+ relevant members in September 2024 and 100+ relevant members in October 2025? They may have wound up by then and that would save on costs.

Schemes can often take a long time to wind up and leaving them out could therefore be detrimental to savers. We would welcome views on schemes in wind up.

The staging deadline for Public Service Pension Schemes occurs during the period when schemes need to implement the McCloud Remedy solutions which will take significant resource commitment.

As for all cohorts, we will consider deliverability challenges before finalising our proposals and we acknowledge further mitigations for Public Service Pension Schemes may be warranted.

Compliance and enforcement

Is there an overall cap on the penalty amount that TPR can impose under the multiple incident approach? Some schemes have more than 100,000 members.

The draft Regulations (paragraph 30) set out the maximum penalty amount that TPR can impose for a failure to comply with a compliance notice or for a contravention of a provision in Part 3 of the Regulations. The amount of the penalty in respect of a failure or contravention is capped at £5,000 for an individual or £50,000 in other cases. TPR will have discretion over if and how to use its powers. TPR will exercise its functions in line with the Regulator’s Code which includes being proportionate and targeted in its approach. Further details will be set out in TPR’s compliance and enforcement policy, which will be consulted on later this year.

Inevitably there are likely to be teething issues with some data provision – will there be a grace period after staging where penalties will not be applied?

The Government expects all trustees or managers to make every effort to comply with the final Regulations, so there will not be a blanket grace period after staging where TPR will not be able to issue penalties. TPR will have discretion when it comes to non-compliance over if and how to use its powers under Part 4 of the draft Regulations. TPR’s approach will be set out further in their compliance and enforcement policy which will be consulted on later this year.

TPR will take a pragmatic approach to regulating non-compliance and will consider the circumstances around non-compliance. TPR are, however, likely to take a dim view of any wilful non-compliance where trustees or managers have not made any attempt to comply with the requirements.

Schemes will have to put in considerable work to achieve compliance. Is there a recognition that the industry in general does not have sufficient spare capacity to make these changes in the proposed timescales?

We acknowledge that some of our proposals are ambitious, but we also think they are broadly achievable. However, we are seeking views in the consultation on the ability of schemes to comply with the proposed requirements. We welcome responses about this and encourage the inclusion of relevant evidence to support responses.

Consumer insight and protection

Are you concerned about the immediacy of access to benefit information when members are already so vulnerable to scammers?

Consumer protection is a central concern for dashboards, and we are keen to understand through this consultation whether the protections and mitigations we have proposed are sufficient.

What people get in real life will almost always be different from the ‘soft number’ on the dashboard – not because of scheme error, but because of the need for standardisation and simplicity. Is there any consumer testing about how they will feel about it when the ‘hard number’ is lower – and who they will blame?

User testing is already underway and will inform the design and wording of messages which are presented on dashboards alongside value data, to help users understand the way in which value data should be received and interpreted.

When can we find out more about the role of a MaPS Guider / MaPS Guidance Officer?

Details can be found on the MaPS website.

Webinar 4: Pensions dashboard retirement values – helping consumers to understand their income in retirement

General

How does the dashboard plan to capture incomes from cryptocurrency investments?

Dashboards will show information on State Pensions and from Occupational Pension schemes and Personal Pension schemes.

Find and view data

Some schemes also have automatic lump sums along with annual pension, will the dashboard be able to cope with this?

Schedule 3, Part 1 of the regulations enables schemed to return lump sums instead or as well as income values, should that be the output of that benefit. This should not be lump sums commuted from pension income.

We have DC products that allowed ‘conversion’ between individual & OPS benefits within the same policy. How should these be displayed? There is no link to a trustee.

We are keen for consultation responses to provide views on how values are currently provided for statements in such cases, and the extent to which these approaches can fit within the ‘special flag’ provision in the regulations and data standards as drafted.

It would seem that dashboards will have very basic information, e.g. for public sector schemes members will see an accrued value of annual pension and projected value of annual pension – at Normal Pension Age. Yet this is simply not going to provide the member with anywhere enough information to enable them to see what their potential options are. Is this not simply going to end up with the member going back to their pension scheme to get the information that they need? They have difficulty understanding the scheme annual benefit statements produced and the dashboard is likely to cause additional confusion for some members.

Our approach to this first phase of dashboards has been to provide enough information to deliver a good user experience, while retaining enough simplicity to aid understanding and be deliverable by schemes. It is possible that future iterations of dashboards might introduce more information.

Value data

How do you project public sector pensions when two parts of the scheme (legacy and reform) have different retirement dates. Legacy schemes have up to 10 years difference in retirement ages to reformed benefits. What research has been done with Police scheme ‘pension savers’?

Where there are separate benefits, each benefit will need a separate value return in line with the requirements set out in Schedule 3, Part 1. Where a single benefit has a number of different tranches, only one set of values is required, and we envisage that schemes will use their judgement to decide how to best deliver the required values. Data Usage guidance will provide guidance on how to approach and submit these values.

Was a monthly rather than annual value considered? It may make more sense for a lot of members particularly those in workplace pension schemes as it aligns to salary etc

Our current thoughts for the Design standards will be to consider whether we can allow some flexibility for how dashboards present “annualised” information to best fit how the user wants to see it (including the period, for example monthly or weekly displays).

How will be annualised accrued/project values be explained on dashboards? The items have fundamentally different implications for DB and DC. How can we ensure users will not conflate the concepts?

This is an important question that applies to the display of all values. User testing will support the development of design standards to ensure that values are explained clearly on their own and also when displayed with other values, including the messages, warnings and caveats that should be provided alongside.

What values would be shown for flexibly retired members where they are both drawing part of the benefit and partially still accruing benefits?

If the individual is taking part of their benefit, then that benefit won’t be displayed on dashboards. If the individual had two separate benefits in one scheme and had only taken part of one, then our view is that the other benefit would be scope for dashboards.

There’s a lot in the consultation about the dashboard providing “comparable data values”. If the front end promotes such comparison which will be the natural course of action this is problematic as such comparisons will be a whole fruit bowl of different pension structures being overly simplified. It also fails to promote a whole of market option comparison which will lead to consumer detriment. With research showing 58% of 50-64 year olds having a retirement saving shortfall what action is the dashboard planning to take to present this much more fundamental comparison?

We accept that values from different schemes and scheme types will be based on different scheme rules and will have different benefits; and that any comparisons will be imperfect.

However, we do think that it is important to present individuals with an illustration of their accrued and projected pension values to support their retirement planning. User testing will be important in the development of design standards, which will set out the way in which value data should be presented, and the messages, warnings and caveats that should be provided alongside.

Non-money purchase scheme data requirements

For a DB deferred member who has two tranches of benefit, payable unreduced at different ages, would the requirement be to quote the current amount of the accrued pension payable at the later age including a late retirement uplift if applicable on one of the tranches?

Where a single benefit has a number of different tranches, only one value is returned, and we envisage that schemes will use their judgement to decide how to best deliver the values within the requirements of the regulations. Data Usage guidance will provide guidance on how to approach and submit these values.

We are keen for consultation responses to provide views on how values are currently provided for statements in such cases, and the extent to which these approaches can fit within the regulations as drafted.

The public sector has a number of schemes where different generations of schemes have come and gone with different normal retirement ages (NRAs). Even where a member has left a predecessor scheme, service in a successor scheme can affect the benefits in the earlier scheme (both through abatement and so called double accrual). Has any thought been given to how the projected benefits for each of the schemes should reflect the impact of service and payment of benefits from other schemes

Where a single benefit has a number of different tranches, only one set of values is required, and we envisage that schemes will use their judgement to decide how to best deliver the required values within the requirements of the regulations. Data Usage guidance will provide guidance on how to approach and submit these values.

We are keen for consultation responses to provide views on how values are currently provided for statements in such cases, and the extent to which these approaches can fit within the regulations as drafted.

Other scheme types data requirements

What is the treatment of a member with 2 NRAs, now that protected Normal Minimum Pension Age (NMPA) applies to transfers only.

Where a single benefit has a number of different tranches, only one set of values is required, and we envisage that schemes will use their judgement to decide how to best deliver the required values within the requirements of the regulations. Data Usage guidance will provide guidance on how to approach and submit these values.

We are keen for consultation responses to provide views on how values are currently provided for statements in such cases, and the extent to which these approaches can fit within the regulations as drafted.

Why include statutory revaluation on excess and no revaluation on GMP? It’s not a like for like comparison. Admin may record a running figure for revalued GMP during deferment.

We understand that existing requirements offer schemes discretion, and we’re keen for consultation responses to provide views on how values are currently provided for statements in such cases, and the extent to which these approaches can fit within the regulations and data standards as drafted.

For public sector schemes with in house Additional Voluntary Contributions (AVC) provided by an insurer – is it the insurer’s responsibility to provide the AVC data or does that fall to the DB scheme?

If it is a scheme benefit, then the scheme is under the legal obligation. However, the data standards will allow for the insurer’s direct return if that is easier and for the AVC values to be linked to the main scheme benefit.

Will there be further clarity on the application of early retirement factors (ERF)/late retirement factors (LRF) for members over minimum pension age or past NRA?

The policy is to allow schemes to use their judgement to decide how to best deliver the required values outlined in Schedule 3, Part 1 of the regulations. We are keen for consultation responses to provide views on how values are currently provided for statements in such cases, and the extent to which these approaches can fit within the regulations and data standards as drafted.

ASTM1

Will FCA Key Features Illustration rules align to new statutory money purchase illustration (SMPI) requirements from 10/23?

The FCA rules on projections apply to a range of packaged products, including pensions. However, the FCA projection rules do not apply to firms who prepare projections to meet SMPI requirements, including where SMPIs are used for dashboards

The assumptions in the FCA projection rules are derived consistently across pensions and other packaged products and reviewed every 4-5 years.

Any changes to the rules, including assumptions, must be considered in light of the purpose of the rules and the FCA objectives.

If we produce benefit statements at 31 March 2023 on the existing AS TM1 can we use those figures for dashboards from 1 October 2023 until 31 March 2024 or will we need to re-run benefit statements at 1 October 2023 using new AS TM1?

If the provider produces benefit statements for members at 31 March each year, the implication of proposed Pensions Dashboard Regulations is that the provider would not be required to provide any ERI figures to dashboards for those members until 31 March 2024. As Schedule 3, Part 1, 1(3) of the regulations states, if the provider decides to provide figures before this, they should be calculated on the revised version of AS TM1 (v5.0) that applies from 1 October 2023. This is to ensure that figures provided to the dashboard environment are calculated consistently across different providers depending on when they are calculated.

Why will it be mandatory to not assume a tax free cash lump sum? For DC schemes most people are entitled to 25% and protected tax free cash is not very common. It’s going to mislead customers as to their Estimated Retirement Income (ERI) because nearly everyone takes the tax free cash lump sum and their actual retirement income will be lower

The FRC’s considerations on this topic is set out in Section 4 of the consultation paper. Although the tax free lump sum at retirement is commonly taken, the limits to this benefit are complex. The amount of cash taken within tax limits depends on various personal circumstances. As such during the early period of the implementation of pensions dashboards it is preferable to ignore tax free cash at retirement and to show the full annuity as the ERI. Given that the pensions dashboards data specification is proposing to not illustrate tax free lump at retirement, we propose to do the same for consistency. The FRC will be keen to receive feedback on this approach in their consultation.

How can SIPP providers assess the price volatility of non-priced assets, e.g. commercial property?

The FRC proposes that if the assets are in a unitised fund, the unit price of the fund may be used to calculate volatility. If they are not, the FRC have proposed that in such cases, no volatility calculation would be required, and the provider would instead assume that the asset values grow in line with inflation.

The FRC will be keen to receive views in their consultation on whether this solution is acceptable and how it could be improved.

On ASTM1- was consideration given to using annuity values based on a long term annuity rate rather than continuing to use a current gilts based approach reflecting current estimated pricing. Will any sensitivities be shown or will members just see one number? This will not help members to understand that there is more risk involved in pursuing more.

Whilst the FRC did consider the use of a long term annuity rate, they proposed to maintain a gilts-based approach as it may be advantageous to reflect the variation with market conditions as users approach retirement, and to avoid overcomplicating the calculations by introducing separate rules for users further from retirement. The FRC will be keen to receive feedback on this approach in their consultation.
DWP’s proposals for this first phase are for a reasonably simple approach to value data on dashboards, to engender trust and confidence, so we are proposing that only a single set of values is shown.

On decumulation I have a concern that money purchase benefits will be annuitized on a single life non-increasing basis, whilst non-money purchase benefits are likely to have retirement income with contingent survivor benefits and be required to increase. Is there a danger that dashboards will show to consumers an over juicy DC apple against what is actually a very decent DB pear?

The FRC’s outreach has shown that there are many conflicting views on what the best approach for decumulation is, and this is discussed in Section 4 of the their consultation paper. The FRC will be keen to receive feedback on this approach in their consultation.