The recent slew of consultations from the Pensions Regulator, FCA and the Pensions Dashboards Programme (PDP) serve as an important reminder that dashboards are coming and the pensions industry still has a lot of work to do.
It has always been the intention that commercial providers would be able to develop pensions dashboards, and there has been much speculation about what these commercial dashboards would be able to offer customers. We now have the answer to this question with the FCA’s consultation on the regulatory framework for dashboard providers. One of the key themes running through this consultation (and the PDP’s consultation on mandatory design standards) is the need to strike a balance between protecting customers and supporting innovation by dashboard providers to engage customers.
Under the proposed regulatory framework, dashboard providers will be able to:
- allow customers to export data to either themselves or the dashboard provider;
- provide post-view services, for example modellers, robo-advice, guidance and investment advice (provided this is given by the dashboard provider or a member of their group and is not defined benefit transfer advice). These services will first have to undergo robust user testing; and
- charge for post-view services.
However, they will not be able to market any products on the dashboard or allow third party advertising. The FCA is concerned about the “halo” effect i.e. giving the impression that these products are recommended and suitable for the individual. While the inability to market products may remove some of the commercial advantages of providing a dashboard, there are still benefits, such as brand recognition, and, at this stage, erring on the side of consumer protection is the better approach.
One of the key challenges for dashboard providers will be designing a dashboard that provides information in an engaging and easy to understand way, while also satisfying the PDP’s design standards and communicating the warnings required by the FCA. Significant user testing of all aspects of the dashboard by non-pension professionals will be key to achieving this.
For Trustees, the Pensions Regulator’s consultation on its Dashboard Compliance and Enforcement Policy is a timely reminder that they cannot just rely on their administrators to ensure they are dashboard compliant. The consultation states:
“We expect schemes to keep clear audit trails of how they took steps to prepare to comply with these duties, to keep a record of compliance as set out in MaPS’ reporting standards and keep a record of steps taken to resolve any issues that arose, such as communications with third parties. We expect them to keep records of their matching policy, and the steps taken to improve their data.”
There are several actions Trustees will need to take if they are to ensure they don’t end up on the wrong side of the Regulator’s policy, including those listed below.
- Engaging with their administrator to ensure the proposed matching policy is appropriate for their scheme and any necessary steps are taken to improve data.
- Agreeing amendments to their administration contract to cover the services required from their administrator to ensure dashboard compliance. These services will need to include:
- establishing and maintaining connection to the dashboard infrastructure (whether directly or through an integrated service provider);
- reporting to the Trustees – the timing of the reports will depend on the information being imparted. For example, a failure to maintain connection or providing view data to the wrong member would need to be reported immediately. Whereas things like number of partial matches and number of find requests could be reported on a quarterly basis;
- record keeping obligations – trustees must keep certain information for at least 6 years; and
- assistance with providing information to the Pensions Regulator and/or MaPS.
- Update data protection notices and policies and carry out a data protection impact assessment.
The above is not intended to be an exhaustive list, but rather it gives an indication of just how much work trustees need to do to be dashboard ready. Some of which will take time – cast your mind back to how long it took schemes to agree GDPR amendments to their administration contracts! If dashboards are not on your priority list for 2023 they should be.