This month’s round-up focuses on developments with Pensions Dashboards, but also features a new Pensions Minister and a reminder on scams.
On 24 November, the Pensions Regulator (TPR) published a short consultation document – "Dashboards compliance and enforcement policy: consultation document" – setting out, amongst other things how it intends to monitor compliance and its approach in cases of non-compliance with the Pensions Dashboards obligations. Understandably, the policy also cross-references other TPR documents covering its enforcement procedures, monetary penalties policy and enforcement policy.
The document makes it clear that as well as trustees, TPR’s target audience includes advisers and third parties whose actions, or failure to act, cause trustees to fail to meet their responsibilities. This includes administrators, Integrated Service Providers and employers. TPR also restates that it recognises “that delivering pensions dashboards is a huge challenge for industry” and whilst it will “work with schemes to reach the best outcome for [members]” it will take “robust enforcement” action in cases where it sees “wilful or reckless non-compliance”.
TPR will focus on schemes:
Key to these will be “robust internal governance…..to identify issues and risks early and put in place mitigations” and “the quality of data held by schemes”.
TPR also states that it expects trustees to:
The document sets out some examples covering each of the areas (a) to (c) above, which provide helpful guidance to TPR’s approach in different scenarios and emphasise the importance of being open with TPR, documenting key decisions and putting in place processes to ensure compliance.
Consultation closes on 24 February 2023.
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The Pensions Dashboards Programme (PDP) has published final standards (subject to ministerial approval) for connecting to the dashboards ecosystem following feedback on a consultation in July/August 2022 and the publication of the final dashboards regulations in October.
The standards set out mandatory requirements that pension providers, schemes and potential dashboard providers will have to follow. They set out requirements regarding the data/explanations to be provided and the security, service and reporting duties for connecting and operating in the pensions dashboards ecosystem.
The standards published so far set out the requirements regarding:
Data standards: the data formatting requirements, including explanatory message options, that pension providers/schemes must follow when returning pensions data
Reporting standards: provide a description of the automated data on dashboard interactions that both pension providers/schemes and dashboard providers must supply in order for regulatory bodies, PDP and DWP, to monitor the effectiveness and health of the ecosystem
Technical standards: sets out the technical details, including flowcharts, as to how all the parts of the dashboard ecosystem interacts with each other
Code of Connection: combines the required security, service and operational standards, to which ecosystem participants must adhere.
We note that the PDP summarises the options for schemes with more than one administrator, most commonly DB schemes with AVCs, as follows:
There will be webinars on the standards on 5 and 7 December 2022 and, for providers, a further consultation on the Design Standards in the winter.
The PDP has also published a response to its consultation and finalised its approach to governance of standards.
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The Pensions Regulator (TPR), Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) – all members of the multi-agency Pension Scams Action Group – have issued a warning to pension scheme trustees and to scheme members to remain vigilant about scammers looking to exploit current economic uncertainty. This follows TPR’s statement in October on managing liquidity and investment risk which also alerted trustees to the risks from pension and investment scams due to market volatility.
Trustees are encouraged to follow best practice by warning members of this “heightened risk” and providing them with common signs of a pension scam including examples of the vocabulary and techniques used by scammers. The warning also highlights the risk of recovery room scams where fraudsters approach people who have already been scammed offering to recover their money for a fee.
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Following the political machinations which resulted in Rishi Sunak’s elevation to Prime Minister, Laura Trott has taken over the role of Pensions Minister after being appointed as the Parliamentary Under Secretary of State at the Department of Work and Pensions. She takes over from Alex Burghardt whose predecessor, Guy Opperman, quickly rejoins the DWP but now as Minister for Employment, while Mel Stride takes the reins as the new Secretary of State.
In HM Treasury, after Jeremy Hunt moved into the role of Chancellor of the Exchequer, John Glen then returned to the Department, but this time as Chief Secretary to the Treasury with responsibility for expenditure on public sector pay and pensions and on State Pensions. The musical chairs continued with Andrew Griffith switching to become Economic Secretary to the Treasury and City Minister as Victoria Atkins stepped into his shoes as Financial Secretary to the Treasury – portfolios for both remain to be confirmed, although the pensions brief usually rests with the City Minister.
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The FCA has published final rules. It has adjusted its proposals to align with those from the DWP for occupational pension schemes. This includes extending the period during which most providers must connect to pensions dashboards in line with that for DC-only master trusts by two months to 31 August 2023. A firm with fewer than 5,000 pension pots (previously 1,000) in accumulation and which intends to use a third-party integrated service provider to connect to dashboards must notify FCA by 30 April 2023 if it wishes to defer its connection date to 31 October 2024.
Later in 2022, the FCA will consult on its proposed regulatory framework for commercial organisations that wish to offer a dashboard, with the authorisation gateway expected to open in Summer 2023.
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