The Government has published its response to the draft regulations consultation on Pensions Dashboards this morning, allowing a small amount of extra time for some schemes to start using Dashboards next year after it recognised that the staging timetable is ‘ambitious’ and could cause ‘challenges’ for industry.
The Government has deferred the deadlines for the first two staging cohorts by two months from 30 June 2023 to 31 August 2023 for master trusts with 20,000+ members and from 31 July to 30 September 2023 for money purchase schemes used for auto enrolment with 20,000 or more members.
It also acknowledged that it is impossible to foresee and prevent all issues and problems and that some would only come to light once the Dashboards are up and running. The response stated that: “Until dashboards are fully operational and tested at scale, we cannot fully understand the range and extent of the challenges that schemes will face in providing data.”
The Government proposed:
- a new provision in the Pensions Dashboards Regulations to cover the process for confirming and announcing the point at which Dashboards become available.
- requirements to display a clear explanation to individuals using Dashboards that point out the limitations, to ‘help mitigate the risk that individuals misuse or misinterpret the data’.
- that projections won’t have to be given when someone’s pot size is less than £5,000
- a clause that values will be available as soon as possible when someone joins a new scheme or when their first statement is issued, or within the first 12 months of joining
- that non-money purchase benefit calculations are simplified
- the use of ‘retirement date’ rather than ‘Normal Minimum Pension Age’
- ways to ensure that the right information is delivered to the right individual through a detailed process of ‘matching’
- a ‘code of connection’ to streamline the way providers connect to Dashboards
- further involvement from the FCA to reduce the risk of the introduction of Dashboards being misused by scammers
Becky O’Connor, Head of Pensions and Savings, interactive investor, the pension and investment platform, said: “The finer points of the Pensions Dashboards programme are now being hammered into place.
The underlying principle is that simplicity of pension information is the priority, even if the underlying data is complicated and relies on estimates and projections. If the information is too complicated, people might not use the dashboards – and that would undermine the entire point, which is that they are widely used and can help everyone to plan their retirement more easily.
“It’s clear there remains some concern that people using dashboards could make decisions based on estimates that turn out to be wrong and that the industry in general does not wish to be held liable for this. It will be important for people to understand the disclaimers presented on dashboards and to realise that projections are not guaranteed but depend on a huge range of factors.
“This does suggest that a programme of education around how to interpret the dashboards will be key to their success in achieving the Government’s stated aim of transforming how people look at their pensions. While the technical implementation details are currently the focus, the wider engagement plan needs attention too, to ensure the project succeeds. It’s taken a long time to get to this point – no one wants it to flop.”