Pensions: what’s new this week 18 October 2021
18 October 2021
Welcome to your weekly update from the Allen & Overy Pensions team, covering all the latest legal and regulatory developments in the world of occupational pensions.
This week we cover topics including: responses to the call for input on the staging of the rollout of pensions dashboards; and a new guide from the Pensions Ombudsman on communicating with members.
- Dashboards rollout: response to call for input
- New TPO guidance: communicating with members
- Towards a greener future: pension scheme case studies
The Pensions Dashboards Programme (PDP) has published a summary of key themes raised in response to its call for input on the rollout of pensions dashboards. As a reminder, the PDP asked for feedback on its proposed order and timing of the staged connection of pension providers to the dashboards ecosystem in order to inform the approach that will be adopted by the government and the Financial Conduct Authority – the government’s consultation on draft regulations for occupational pension schemes is expected at the end of 2021.
The PDP proposed that staging would be comprised of three ‘waves’. Wave one (1,000+ memberships) would run for up to two years from April 2023. It would commence with master trusts and FCA-regulated providers (in spring 2023), followed by DC schemes used for auto-enrolment (during 2023), and then all remaining occupational schemes with 1,000+ memberships (in order of size). The largest DB schemes would onboard in 2023. It would be followed by wave two (100 to 999 memberships) and wave three (small and micro schemes).
The PDP has said that there was generally broad agreement with the proposed sequencing, but concerns around the timeline for delivery. There was feedback that clarity is needed on the requirements (including data and technical requirements) in order to prepare for dashboards, and to provide an accurate estimate of the lead time that would be required to connect to the ecosystem. Some respondents also argued for a ‘find-first’ approach (where the dashboard displays information about the relevant pension providers for the user, without data on benefit values). Concerns included: the timeline was too ambitious; how the scheme size banding would be determined (with suggestions that it should only include active and deferred members); issues with data, complex legacy systems and products, resourcing and capacity; and challenges for DB schemes about view data (in particular, the estimated retirement income (ERI)).
The PDP plans to publish technical and operational standards for data providers in winter 2021/22. In response to concerns about ERI, it will conduct further research and user testing about the data to be displayed to users.
Trustees should be considering the steps they need to take to prepare for the rollout, and scheduling relevant projects into their business plan. The Pensions Administration Standards Association has published guidance on preparing for dashboards: read the guidance. The PDP has an information hub for data providers including pension schemes: visit the hub.
The Pensions Ombudsman has published a short guide on best practice for communicating with members. This includes a list of ‘Top tips on how to avoid the Ombudsman’.
Sustainability and UK pension schemes is a hot topic at the moment, and new climate-change-related duties came into force for the largest pension schemes and master trusts on 1 October.
A new publication from the Pensions and Lifetime Savings Association contains case studies with experience and advice from a number of pension funds on issues including the path to net zero, and producing the first TCFD report: read the publication.
You can read more about the new duties for pension scheme trustees in our information hub: Sustainability and UK pension schemes: Preparing for the new TCFD requirements.