In a consultation paper published on 11 February 2022, the FCA sets out its proposed rules requiring FCA-regulated pension providers to connect to the pensions dashboard service, identify matches with any members seeking to view their pensions via the dashboard service, and provide the required information for members to view. 

The DWP has published a separate consultation on the regulations that will impose similar requirements on the trustees of occupational pension schemes.  The draft regulations only provide for schemes with 100 or more relevant members to connect to the dashboard, so will not catch SSASs, though the consultation does not rule out the possibility of smaller schemes being required to connect to the dashboard at some point.

The FCA aims to publish its Policy Statement and final rules in Autumn 2022.

Background

Pensions dashboards will be online platforms for individuals to access information about all their pension schemes in one place.  The information will include accrued and projected values of the individual's benefits.  Dashboards will not hold this information themselves, but when a member makes a request, the dashboard will search for matches with the member's details and pull the data directly from the pension schemes for the member to view.  The Money and Pensions Service (MaPS) will be responsible for ensuring delivery of the digital architecture underpinning the pensions dashboards and will develop and host its own pensions dashboard.  Over time it is envisaged that other pension dashboard providers may enter the market.

Timescale for connection to the dashboards

The FCA proposes that providers of personal pension schemes should generally be required to connect to the dashboard by 30 June 2023 (the same deadline as for master trusts with 20,000 or more relevant members).  This will mean that personal pension schemes will be the first schemes to connect to the dashboard. 

Providers that have fewer than 1000 pots in accumulation and will be connecting to the dashboard via a third party service provider will have the option of a deadline of 31 October 2024, but must notify the FCA by 30 April 2023 if they wish to rely on this deadline. 

Pension providers may connect to the dashboard directly or via an "integrated service solution" which may be provided by a third party.  MaPS will be consulting later this year on technical standards which pension providers will be required to adhere to.  Providers will be required to cooperate with MaPS as far as is reasonably necessary to assist with its dashboard functions.

The FCA anticipates that providers will be able to request a preferred connection date that falls within the 3 months preceding their deadline, though this will be subject to agreement from MaPS.

Matching process

On receiving an individual's data via the dashboard service, pension providers will be required to conduct an automated search to establish whether the individual's details match their member records.  MaPS will publish data standards later this year specifying the format in which the dashboard service will provide search details to pension providers.  The FCA's proposed rules do not specify what elements of the data pension providers should use to search their records for a match.

If a possible match is identified, but not it is not possible to establish a definite match, the FCA's rules will require firms to make a "possible match".  This will result in the individual searcher receiving an error message to say that the scheme requires further information to decide whether there is a match.  The FCA says the timeframe that is reasonable for resolving such cases will depend on the circumstances of the individual case.

The consultation sets out various data that pension providers will need to provide to an individual following a match.  This includes current and projected pension values which will need to be based on a statutory money purchase illustration (SMPI) produced for the member in the previous 12 months or another calculation performed using the same methodology within the previous 12 months.  The consultation flags that the Financial Reporting Council (FRC) is consulting on significant changes to Actuarial Standard TM1 which sets out the basis on which SMPIs must be calculated.  (See separate  item on this.)  The revised TM1 is expected to come into force from 1 October 2023.  Once the first SMPI using the new methodology has been produced for a member, benefit value data provided to a member following a dashboard search will need to be provided in accordance with the revised TM1.

Pension providers will need to retain for six years various information about the matching process and provide such information to MaPS or the FCA if requested.

Our thoughts

Personal pension schemes will be among the first schemes required to connect to the pensions dashboard service.  The timescale proposed by the FCA appears to be a demanding one so providers should be putting project plans in place to ensure they are able to comply.