Consultation outcome

Summary of key policies: Draft Pensions Dashboards Regulations 2022

Updated 15 July 2022

Summary of key policies

This summarises the key policies relating to each chapter, as set out in the Government’s response: Draft Pensions Dashboards Regulations 2022. The summary includes changes made since the consultation was published in January. It does not cover every aspect of the Regulations, for more details, including the Government’s rationale, please read the full Government response publication. Regulations will be laid at a later date, subject to Parliamentary timetabling.

The Regulations set out requirements to be met by both qualifying pensions dashboard services, and by trustees or managers of relevant occupational pension schemes in Great Britain. We anticipate that the Department for Communities in Northern Ireland will make corresponding legislation to ensure parity across the United Kingdom. The Financial Conduct Authority (FCA) consulted separately on rules for personal and stakeholder pension providers.

Chapter 1: Overview including oversight of standards

We have included a new draft provision on the Dashboards Available Point (DAP), which is currently subject to further consultation^{[footnote 1]}. It sets out that the DAP is the date from when qualifying pensions dashboard services will be made available to the public. The draft provision states the Secretary of State must publish a notice 90 days in advance of the DAP. The Secretary of State must be satisfied that dashboards will be ready to support widespread use, having regard to certain factors and having consulted with our key delivery partners – the Money and Pensions Service (MaPS), the Pensions Regulator (TPR) and the Financial Conduct Authority (FCA).

We will still require the Secretary of State for Work and Pensions to approve the first set of standards to be published by MaPS, and any subsequent amendments that are more than minor technical changes.

Chapter 2: Data

For members with money purchase benefits, trustees or managers must provide accrued pot, annualised accrued and annualised projected values. A projected pot value must be provided if held. Projected values, as well as the annualised accrued value, are only required from 1 October 2023, once a pension illustration has been given (but may be provided before this time).

For members with non-money purchase benefits who are active members, trustees or managers must provide an accrued and projected value.

For members with non-money purchase benefits who are deferred members, trustees or managers must provide an accrued value. This may be calculated using a simplified method in certain circumstances within 2 years of the scheme’s connection date.

Specific provision has been made to require, for ‘Chapter 1’ Public Service Pension Schemes, two alternative values to be provided to reflect the differing benefits that a member may elect to receive in respect of the Public Service Pensions and Judicial Offices Act 2022. Following consultation, drafting changes have been made to improve the definition of these requirements, but the policy has not changed.

We have clarified that where a non-money purchase benefit is comprised of tranches, trustees or managers must provide either a combined value, or separate sets of values, depending on what they consider is the best representation of the benefit.

For members with cash balance benefits who are active members, trustees or managers must provide an accrued fund value and a projected fund value, and from 1 October 2023, will receive an annualised accrued and annualised projected value.

For members with cash balance benefits who are deferred members, trustees or managers must provide an accrued fund value, and from 1 October 2023 an annualised accrued value.

For members with collective money purchase benefits who are active members, trustees or managers must provide an annualised accrued and annualised projected value.

For members with collective money purchase benefits who are deferred, trustees or managers must provide an annualised projected value.

We have made some changes to the requirements for hybrid benefits. For members with hybrid benefits, trustees or managers of the pension scheme must supply value data which they consider best represents the value of the member’s benefits under the scheme, calculated in accordance with what the trustees or managers consider to be the appropriate methodology for the relevant benefit type.

For new members, administrative data must be provided as soon as practicable, and no later than within 3 months of joining a scheme if the member makes a request for information in that time.

A similar provision has been added relating to values. For new members seeking view data, value data must be provided as soon as practicable, but no later than the sooner of the point at which the first statement has been produced for that member, or within 12 months of the end of the first full scheme year of which the member was a part of the scheme.

Exemptions apply to providing money purchase projections^{[footnote 2]} where a member’s accrued rights under the scheme are less than £5,000 and no contributions have been made since the previous illustration date and the member has been notified that information will not be provided until further contributions are made. Then, no projected pot or annualised projected values are required.

There is also an exemption to providing money purchase projections where a member is within 2 years of their retirement date.

Where these exemptions apply, trustees or managers can still choose to provide projected information voluntarily. Exemptions do not apply to accrued information.

Chapter 3: Find and View

Matching

There have been no changes in relation to our policy on matching. Matching must be completed immediately. Where there is a positive match, schemes must immediately create and register a Pensions Identifier (PeI).

Possible matches

In the case of a possible match, we have amended regulations to provide schemes with more clarity over their requirements. Schemes must, amongst other things, immediately provide a limited form of administrative data and an error message. This will provide individuals with the necessary contact details to contact their scheme to resolve the possible match. If the individual does not contact their scheme within 30 days or does make contact but the scheme cannot resolve the possible match within a reasonable time allowed by the scheme, the scheme must delete the limited form of administrative data. If a match is made, the scheme must notify MaPS.

Match made

There have been no changes in relation to our policy on a match that is made. Where a match is made (including following the resolution of a possible match) schemes must provide view data referred to in the Regulations, in the format and manner set out in data standards and they must have regard to guidance in doing so.

Response times

In relation to response times, there have been no changes. The regulations outline that:

• Administrative data must be provided immediately after a view request has been received.
• Where value data 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, it must be returned immediately.
• Where a new calculation must be made and where all benefits provided to a member are money purchase benefits, value data must be returned within 3 working days.
• In all other cases where a new calculation must be made (including where the benefits provided to a member are hybrid benefits which depend on anything other than a money purchase calculation), it must be returned within 10 working days.
• Response times apply from the date on which a PeI is registered for a positive match or from the date on which it is re-registered as a match made (from a possible match).

Chapter 4: Connection

Most of the proposals on connection have not changed. Trustees or managers will be responsible for connecting relevant occupational pension schemes to the central digital architecture, typically within a one-month connection window and no later than the staging deadline relevant to their scheme. However, the first cohort of schemes connecting (master trust schemes with 20,000 or more relevant members) will have a five-month connection window starting in April 2023 (increased from the three months proposed in the consultation).

Schemes must connect their scheme in accordance with connection, security, and technical standards, which will be published by MaPS.

When undergoing connection, trustees or managers must have regard to guidance published by MaPS and/or the Pensions Regulator.

Trustees or managers may apply to MaPS to connect their scheme earlier than their connection window, or (in cases where the scheme has fewer than 100 relevant members) on a voluntary basis.

Trustees or managers will be required to cooperate with MaPS to assist with the exercise of its functions in relation to pensions dashboard services.

Connection to the digital architecture is not reversible unless all the scheme’s members become pensioner members, the administration of the scheme moves outside of Great Britain, or the scheme stops being registrable.

Once connected to the digital architecture, trustees or managers will be required to report specified information, as set out in reporting standards determined by the Money and Pensions Service, or the Pensions Regulator.

Chapter 5: Staging

Relevant occupational pension schemes will be required to connect to dashboards in sequence, placed into cohorts according to their size and type – this is referred to as staging.

A relevant member is a member of an occupational pension scheme who is an active, deferred or pension credit member.

The reference date (on which to base the number of relevant members) means the scheme year end date falling between 1 April 2020 and 31 March 2021 (inclusive).

The staging deadlines for each cohort will be set out in the Regulations in a staging profile, covering large (1000+ relevant members) and medium schemes (100-999 relevant members).

Staging begins when the first cohort’s connection window opens on 1 April 2023. The final staging deadline for large schemes is 30 September 2024. The final deadline for medium schemes is 31 October 2025.

Staging for initial cohorts

The staging deadlines for the first two cohorts (20k or more relevant members) have been extended by two months, as follows:

• master trust schemes with 20k or more relevant members – deadline was 30 June and is now 31 August 2023;
• money purchase schemes used for automatic enrolment with 20k or more relevant members – deadline was 31 July and is now 30 September 2023. (The 30 September 2023 deadline for master trusts and money purchase used for AE schemes with 10,000-19,999 relevant members has not changed.)

We have also removed the August 2023 staging break to accommodate these changes.

Public service pension schemes

The staging deadline for public service pension schemes (PSPS) has been changed from 30 April 2024 to 30 September 2024.

Once connected, and by the staging deadline, PSPS must provide value data on request once a Remediable Service Statement (where applicable) has been issued to the member, or from 1 April 2025, whichever is the sooner.

Local government pension schemes must provide value data voluntarily or from 1 April 2025, on request.

The above changes affecting PSPS will also apply to additional public sector schemes which are impacted by the McCloud remedy. This includes the scheme for members of the UK Parliament and the scheme for members of Senedd Cymru or the Welsh Parliament.

Hybrid schemes (including hybrid master trusts and collective money purchase schemes)

The staging deadlines for hybrid schemes will now be based on the total number of relevant members across both money purchase and non-money purchase sections. The entire scheme should then be treated as a non-money purchase scheme to work out the staging deadline.

The first staging deadline for non-money purchase schemes is 30 November 2023. This will also be the earliest staging deadline for hybrid schemes. Master trust schemes that have both a money purchase section and a non-money purchase section will be treated as hybrid master trust schemes (and therefore hybrid schemes) for staging purposes. This means they will stage alongside hybrid schemes as opposed to master trusts, with the earliest staging deadline being 30 November 2023.

As with hybrid master trusts, collective money purchase schemes which also have a non-money purchase section will also be treated as hybrid collective money purchase schemes (and therefore hybrid schemes) for staging purposes.

Schemes in assessment with the Pension Protection Fund (PPF)

Following the consultation, we have added in provision relating to schemes in PPF assessment.

i. Where an entire scheme is already in PPF assessment before its staging deadline, it will be exempt from the requirement to connect. Where one or more sections of a scheme is not in assessment, the entire scheme would still be required to connect.

ii. Schemes that are exempted based on point (i), which subsequently come out of assessment but do not enter PPF, will be required to connect by the later of either:

• 6 months from the end of the assessment period; or
• the staging deadline for the scheme as per its type, size and the reference date.

iii. Where a scheme or section of a scheme enters PPF assessment after it has already connected to dashboards, the scheme will be required to maintain connection. The scheme (or section of scheme) will not however be required to provide value, context or signpost data.

iv. Connected schemes (or sections of schemes) that subsequently exit PPF assessment but do not enter the PPF will be required to meet the full data requirements as soon as practicable and by no later than 3 months after the exit date.

Schemes in wind up

Following the consultation, we have added in provision relating to schemes in wind-up. Schemes in wind up will still be required to connect according to their staging deadline. However, connected schemes (or sections of schemes) in wind up should only provide value data (plus contextual and signpost information) if the trustee or manager of the scheme considers it appropriate to do so.

New schemes and schemes which change in size

The policy on new schemes and schemes which change in size remains unchanged since the January consultation, which is as follows:

A scheme which did not exist at the reference date or had fewer than 100 relevant members, but then comes into existence (if it did not exist previously) and meets the size threshold within two years of the reference date (i.e. scheme year end between 1 April 2021 and 31 March 2023 inclusive) is required to connect by the later of either:

• six months from the end of the scheme year in which it came into being or met the size threshold; or
• the staging deadline for the equivalent scheme of that size and type (as if it existed on the reference date).

A scheme which did not exist at the reference date or had fewer than 100 relevant members, but then comes into existence (if it did not exist previously) and meets the size threshold in the scheme year(s) post 1 April 2023, is required to connect within 6 months of the end of the scheme year in which it came into existence (or met the size threshold).

A scheme’s staging deadline will remain fixed even if it subsequently changes in type or size unless it falls out of scope.

Applications to defer a staging deadline

The Secretary of State for Work and Pensions may consider applications to defer a staging deadline up to a maximum of 12 months. Applications must meet the criteria set out in the Regulations, including that:

• before the regulations come into force, trustees or managers had in good faith embarked on a programme to transfer their data to a new administrator, or had entered a contract to retender the administration of the scheme;
• the timing conflicts with the scheme’s staging deadline;
• there is evidence that complying with the staging deadline would be disproportionately burdensome or would put members’ data at risk;
• there are steps in place to connect at the earliest opportunity; and
• applications must be submitted at least two months before the staging deadline.

Further guidance will be published by the Department for Work and Pensions in due course.

Chapter 6: Compliance and Enforcement

Part 4 of the draft Regulations includes measures to enable the Pensions Regulator to take enforcement action in relation to the breaches of the requirements placed on trustees or managers of relevant occupational pension schemes by Part 3 of the draft Regulations.

The Pensions Regulator’s powers will include the ability to issue:

• Compliance Notices
• Third Party Compliance Notices
• Penalty Notices

The maximum penalty for an individual penalty notice will be £5,000 in the case of an individual, or £50,000 in other cases. The draft Regulations include a mechanism for the review and appeal of penalty notices. The Pensions Regulator will have the ability to issue multiple penalty notices within a single document if there have been multiple contraventions of the Regulations.

There have been no changes to the compliance measures since the consultation.

Chapter 7: Qualifying Pension Dashboard Services

Part 2 of the Regulations prescribes the requirements to be satisfied in order for a pensions dashboard provider to become a “Qualifying Pensions Dashboard Service”.

Commercial providers that satisfy the prescribed requirements for Qualifying Pensions Dashboard services (QPDS) can operate a dashboard. The Money and Pensions Service (MaPS) will have its own dashboard.

The requirements for QPDS include connection and functionality, displaying of the view data, reporting, and monitoring of the dashboard and enabling an audit by an independent person. We have made a small clarification to the reporting requirements so that more granular information could be required for audit purposes.

We have not made any changes to the regulations on compliance with MaPS standards. A QPDS would be required to conform to MaPS’ standards, which would set out the technical, security and operational details relating to how a dashboard service should connect to the digital architecture and operate.

A QPDS must also obtain and maintain FCA authorisation and permission to undertake a new regulated activity. This has been taken out of the Regulations with the expectation that this will be covered in the amendment to the Regulated Activities Order 2001 and is therefore not required within these regulations as well.

The regulations have been amended to clarify the period that providers must submit the outcome of the audit report to MaPS. The Regulations will state that the audit report must be submitted to MaPS within 20 working days of the date of the initial audit report or 20 working days from the date, which is one year from the initial audit, as appropriate.

1. See Pensions dashboards: further consultation ↩

2. Including a hybrid scheme in respect of a member with money purchase benefits, or where a benefit is calculated with reference to both money purchase and benefits other than money purchase benefits. ↩