The pensions dashboards of the 2020s will, hopefully, help staff on a different kind of journey: a digital path to retirement.
Recent updates from the Pensions Dashboards Programme (PDP) has set out a timeline for bringing dashboards online from 2023 onwards, though this may slip given the complexity of the project. While there is still some distance to go, pension scheme trustees should be planning now for key legal actions which are likely to arise in the run-up to the obligations going live.
The legal framework of dashboards
The Pension Schemes Bill 2019-2021 continues to make its way through the House of Commons. When it becomes law, it will introduce a legislative framework under the pension schemes required to provide data to dashboards. It is currently expected that schemes will participate in the dashboards in stages, to ensure an orderly roll-out.
The Bill is broadly worded, so the detail about how this will happen will need to be set out in regulations. We are also expecting regulatory guidance to be published closer to implementation.
One key function of the dashboards will be to reunite employees with their lost pension pots. An action for trustees will be to make sure that their data is in good shape, and some schemes may need to start work to digitise records or update legacy systems. The PDP is planning to release initial data standards in December 2020, and trustees may want to start checking with their administrators whether work is required to meet those standards, particularly given possible capacity jams arising from other projects such as guaranteed minimum pension equalisation, consolidation or de-risking.
The scheme administrator will be the key middleman between trustees and the dashboards. Trustees should engage with their administrators and software providers to ensure that they are monitoring and preparing for the dashboard obligations, noting additional work may be required where there is an in-house administrator. In due course, contract changes may be needed.
The existing data protection laws will apply to the pensions dashboards. Trustees will need to be happy that by plugging into the dashboards they are not breaching any obligations, that they have given appropriate notices to members, and that they have appropriate contractual protections with administrators. Legal advice can help prepare the way for this when further clarity is available on the framework for the dashboards.
Frontrunners and engagement
While the end of the dashboard journey is still some way off for many schemes, the PDP has suggested some schemes can join the programme early on a voluntary basis. These schemes will need to pay particular care to ensure they meet their legal obligations in this developmental phase.
Even where pensions schemes do not want to participate ahead of time, they should engage with the PDP where necessary to provide feedback, for example where a proposal is not workable for their specific circumstances.
Oliver Topping, is a senior associate at Sackers.