PDP launches staging call for input for pensions dashboards

The Pensions Dashboards Programme (PDP) has launched a call for input on the order and timings for the staged compulsory connection of pension providers to the dashboards ecosystem, in what has been highlighted as a "huge milestone" by the industry.

Running until 9 July 2021, feedback from the call for input will be used to help inform policy development ahead of the legislation that will bring the compulsion into effect.

The proposals were developed in collaboration with the Department for Work and Pensions (DWP), the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR).

The staging principles have focused on achieving the widest coverage of pensions as soon as possible, whilst also considering industry, regulatory and PDP deliverability.

PDP stressed that they also aim to balance the competing demands of pace and deliverability, warning that whilst consumers want access as quickly as possible, pension providers need sufficient time to prepare, whilst PDP itself also needs time to test systems.

In line with this, PDP has recommended a three wave staging process, with wave one consisting of the largest schemes with over 1,000 members, wave two representing medium schemes with 100 to 999 members, and wave three covering small and micro schemes with 99 members or less.

Wave one would be expected to start in April 2023 and to run for up to two years, with a further three distinct cohorts recommended within this subset.

This could mean that dashboards will be not be fully operational until 2025.

In particular, cohort one, master trusts and FCA regulated providers of personal pensions, will be expected to start connecting from spring 2023, with the state pension also expected to be available alongside this first staging cohort.

Cohort two, defined contribution (DC) schemes used for automatic enrolment, and cohort three, covering all remaining occupational schemes with 1,000 or more memberships, are then expected to be onboarded “during 2023”, alongside the largest defined benefit (DB) schemes.

In support of the call for input, PDP will be running two webinars on 8 and 9 June, to provide information to data providers around staging to pension dashboards.

Alongside this, it has also created an information hub to help support data providers fully asses the impact of the proposals and prepare to connect, which will include a breakdown of the steps data providers need to take, and an overview of how the ecosystem will work.

PDP principal, Chris Curry, highlighted the call for input as a "concrete opportunity" to help shape the proposals at an early stage, which will then feed into the formal consultation from DWP later this year.

He stated: “We are grateful to our delivery partners and colleagues across the pensions industry that have fed into the development of our staging recommendations, providing evidence and insight to shape these proposals.

“The PDP is reliant on the understanding and cooperation of our colleagues across the industry. We would urge you to respond to the call for input, to have your say on the proposals and shape the next steps towards making dashboards happen."

Pensions Minister, Guy Opperman, added: “Making dashboards available to people at the earliest opportunity is a key part of our strategy to get people more informed about and involved with their pensions savings.

“So I would encourage anyone with an interest in dashboards to feed in their views on the programme’s emerging proposals for how and when we bring pension schemes on board from 2023.”

Industry organisations have also welcomed the latest update from the PDP, as the Pensions and Lifetime Savings Association (PLSA) director of policy and advocacy, Nigel Peaple, highlighted the update as demonstrating the "substantial progress" being made.

However, Peaple raised concerns over the timetable, noting that the current proposals would see all large pension schemes begin connecting to pensions dashboards during 2023 with a view to making the material available to savers at some point after that, "perhaps in 2024 or 2025."

"Given the complexity of the task – something acknowledged by the PDP in their consultation – and the fact that we do not yet have complete certainty about the data requirements, it is today too early to assess whether this timeline is achievable," he warned.

"Whatever the final timescale for connection agreed upon, it is imperative that nothing is done to put at risk the pension savings of scheme members. It is better to do it right, than do it quickly.”

Furthermore, whilst Smart Pension director of policy, Darren Philp, highlighted the call for input as "another hugely important milestone" for the PDP, he agreed that there were concerns around the complexity and timetable surrounding the proposals.

He explained: "The proposed staging profile with DC master trusts and providers of personal pensions going first is sensible and as expected, and helps achieve good dashboard coverage quickly, which is important for the dashboard's success.

"The timetable is ambitious and there is a lot of work for schemes to do to prepare for the dashboard, but the pieces of the jigsaw are slowly falling into place, which is great news all round.

"The consultation also reaffirms the government's commitment to have state pensions on the dashboard in the first wave which is also crucial to its success.

"While it makes sense for smaller schemes to stage later, we need to ensure that there isn't undue delay in delivering comprehensive coverage if the dashboard is to achieve its potential.

"There are tricky issues that need to be resolved and fall into place, not least for public sector schemes given the McCloud judgement, but the prize of a comprehensive pensions dashboard is one worth pursuing."

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