This blog was written by Leonardo Robinson
This consultation to make the Pensions Dashboard a reality and which closes on 8 April is of critical importance to all FCA-regulated pension providers, who should being planning if they have not done so already. It sets out a draft new rule COB 19.11 to introduce three duties:
- to register and connect their relevant pension scheme with the Money and Pensions Service (MaPS);
- to provide and facilitate the provision of sufficient information in response to pensions dashboard find requests and pensions dashboard view requests; and
- to comply with pensions dashboard standards and have regard to pensions dashboard guidance as appropriate.
An automated process will be required to handle a request for record tracing. The new rules do not go as far prescribing criteria for matching requests to records, so providers will have some leeway to use their own processes. One area of risk is how precise a match must be for a provider to determine that the matching is definitive, because a provider will want to remove any scope for a data protection breach. Providers will be obliged to have regard to guidance from MaPS on this point and should take the opportunity to make representations if they feel that the guidance will leave them at risk.
If a definitive match can be made, the provider will be required to provide significant amounts of information about the consumer’s pension. This includes:
- administrative data: this is a catch-all term for details about the pension, the consumer and the employer
- an additional signpost, which includes website addresses for obtaining certain further information
- value data, being the information about current and projected value of the pension.
Special considerations apply to those hybrid schemes where current or projected values are calculated by more than one method, for example, a scheme which provides a defined benefit underpin to a money purchase benefit. The Government proposes that only the better benefits will need to be shown, but detailed regulations have not yet been made.
There will be no automatic regulatory reporting requirement, but providers will be obliged to keep records and provide information to the FCA on request.
Providers must be able to gather and retain the records from day 1. For pension providers of personal and stakeholder pension schemes, the FCA is proposing an implementation deadline of 30 June 2023, which is the same deadline as that proposed for commercial master trusts. Providers that have fewer than 1,000 pots in accumulation and rely on third-party integrated service solution provider to achieve compliance, may be able to rely on a transitional provision offering a later implementation deadline of 31 October 2024. Firms that intend to rely on this transitional provision must notify the FCA by 30 April 2023.
It is clear that providers will need to be confident that their own records will be adequate to comply with the new processes and standards. They need to study the consultation, along with draft regulations and MaPS materials to be certain that they will be able to comply from the outset. Complying with the new rules may be challenging, in particular for those with legacy systems if they contain incomplete data and were designed without regard for compatibility with automated external communications. Difficult decisions may therefore need to be made about data cleansing and systems migration, potentially extending the period which a provider would need to implement the changes. Providers should now be looking at resourcing and timescale issues if they have not already done so.
If you would like further information or advice in relation to the Pensions Dashboard’s obligations in respect of FCA-regulated pension providers, please contact Alice Honeywill or Leo Robinson.
This consultation will primarily interest: life insurance companies operators of self-invested personal pensions (SIPPS) individual consumers bodies representing the interests of consumer trade bodies representing pension providers