The PDP recommends that staging occurs in three waves, with the first wave in April 2023 (larger Master Trusts along with Financial Conduct Authority (FCA) regulated providers of personal pensions and occupational schemes with more than 1000 members).
Although still at consultation stage, industry participants should now have a good understanding of how the dashboards are likely to operate, including the technical steps that pension providers will need to take to work with the dashboard ecosystem.
Many schemes will rely on technical integrations developed inhouse by third party administrators (TPAs), or those developed by integrated service providers (ISPs). As a result, it will be important to consider if existing administration contracts are fit for purpose from a dashboards perspective. Key considerations include:
- Technology solution: is the TPA planning to develop its own inhouse solution or will it use an ISP solution? If the latter, will the scheme be required to contract directly with the ISP or will the TPA engage the ISP as a subcontractor? If the administrator is developing its own solution, will there be any technical impacts on performance of existing IT systems (for example, resulting from additional automated requests made via dashboards)?
- Data cleansing: the PDP’s proposed stages are based on the fact that Master Trusts and FCA-regulated providers are already under significant data reporting requirements and are therefore expected to be in a stronger position in terms of data availability and quality. However, most schemes will need to undertake a data mapping and cleansing exercise. Schemes should discuss this with their TPA and plan for any project activities. How can they be weaved into any existing data exercises (for example relating to GMP equalisation) and could dashboard requirements be incorporated into wider data management plans?
- Cost: does the TPA intend to charge for dashboard integration either on an up-front project basis or through ongoing additional fees?
- Risk allocation: pension providers will retain ultimate responsibility for meeting timing and technical integration requirements. Will the TPA take contractual responsibility for achieving these and what remedies will the scheme have, if any, in the event of a delay or failure to integrate?
As previous compliance exercises such as pensions freedoms and GMP equalisation have demonstrated, early engagement with TPAs (including as part of any upcoming renewals and procurement processes) will be key to ensuring a smooth path to compliance with minimal disruption to members.
This article was featured in Pensions Aspects magazine July/Aug edition.
Last update: 16 July 2021