Most of the jigsaw is now in place, so trustees and managers can press ahead in collaborating with their administrators in deciding how, once they have connected to the Money and Pensions Service (MaPS), they will respond to requests from Pensions Dashboards.
The DWP has laid before Parliament the Pensions Dashboards Regulations which codify the changes outlined in the Response published on Dashboards Regulations. It has also published guidance on deferring the staging date and a response to its follow-up consultation on Pensions Dashboards which confirmed that the Secretary of State must give at least six months (previously 90 days) notice of the date when dashboards will be made available to the public. Earlier this month, the Financial Reporting Council confirmed the changes to AS TM1 which defines the assumptions to be used to calculate some of the amounts to be displayed in Pensions Dashboards from 1 October 2023.
Trustees and managers will need to work with their administrators and other advisors to make decisions in the following areas.
The regulations confirm the staging dates in line with the consultation response. The earliest dates are for schemes with 20,000 or more active, deferred and pension credit members at the scheme year end date which fell between 1 April 2020 and 31 March 2021 inclusive. The staging deadline for the largest money purchase master trusts is 31 August 2023 and the date for schemes where some of the benefits are non-money purchase is 30 November 2023. There is an option to request voluntary early access or to defer the staging date if the restrictive conditions outlined in the regulations and DWP guidance apply. The regulations also set out the easements for schemes in PPF assessment or winding up.
There were no material changes to the Regulations here. The onus is still on trustees and managers to work with their administrators to agree on what data they need to identify whether an individual has, or might have, benefits in the scheme.
There will be four benefit types: money purchase, non-money purchase (excluding cash balance), cash balance and collective defined contribution (CDC). The wording for all of these, and that for the contextual information that must be provided with the benefits, has been tweaked. Legal advice may be required, particularly for cash balance and CDC benefits, to understand what the legislation requires. In addition, it appears that dashboard information may not be consistent with the benefit statements these schemes are providing.
As expected, a projected pot and pension illustration is only required once a benefit statement has been issued under the new assumptions, which apply from 1 October 2023. Trustees and managers will need to decide whether to bring forward, or postpone, the production of statements under the new AS TM1 and whether to provide figures calculated using the older assumptions in the interim.
For a period of up to two years after the scheme connects to MaPS, trustees or managers can choose to adopt a simplified method for calculating a current amount for deferred non-money purchase benefits (other than cash balance) provided that:
A hybrid benefit refers to a more complicated benefit structure which requires at least two calculations to define the benefit eg a DC pot with a GMP underpin. Trustees or managers will need to decide which of the four benefit types best represents the benefit and tell members which method they have used.
Parliament must approve, or reject, the Regulations – it cannot amend them. Once approved, the Pensions Dashboard Programme and Financial Conduct Authority are expected to publish standards and rules setting out further details. The Pensions Regulator is also expected to consult on its compliance and enforcement strategy. Finally, a Bill making it a criminal offence for trustees to be reimbursed for any fines imposed for a failure to meet dashboard requirements is expected to become law in due course.
