Extensive guidance has been released by the Pensions Administration Standards Association (PASA) covering a wide range of areas that will need to be considered by trustees when planning what “value data” will be presented to savers when they access pensions dashboards. ‘Value data’ is information about each member’s benefits including an estimate(s) of their defined benefit (DB) pension and, for defined contribution (DC) pensions, their pot.
Elements of the guidance will be relevant to all schemes and some will face multiple issues that affect each other and need to be considered in tandem. Trustees will need to discuss how they intend to meet the requirements with their advisers. We expect the following complex areas to require particularly careful consideration: anti-franking; split administration provision where responsibility for the provision of AVC data to the dashboards lies with another provider and DB or DC underpins.
There are a number of areas where the Pensions Dashboards Regulations 2022 (the “Regulations”) permit more than one way of presenting the information, for example on tranches with different payment ages and late retirement. In other cases, the Regulations do not set out specific requirements, including GMP equalisation, rounding, and partial retirements. PASA has aimed to provide guidance and possible approaches where it can. For each area of focus, PASA has identified options for trustees on how to provide the value data to the dashboards, together with a recommendation based on the options put forward. PASA recognises that schemes may opt for a different approach based on past scheme practice, what has been communicated to members and the materiality of the issue on the members’ benefits.
The main aims of the guidance would seem to be to avoid confusion for members who access the dashboards by establishing uniform presentation of data where possible and preventing misinterpretation of the benefits displayed. Members may use the projected benefits shown for future financial planning, so it is crucial these are not materially over or understated.
Trustees will need to decide whether to carry out calculations in advance and store the data for immediate access, or to provide information “on call” ie, to calculate the data each time a member requests the information from a dashboard. Where it is challenging to produce value data automatically, PASA recognises that a warning note should accompany the value data and such data should be provided “on request” only. There is a general expectation that schemes will want to have data and calculations ready to reduce their need to respond to ad-hoc requests and the subsequent burden on administration and actuarial teams who are required to contribute in order to meet the legislative requirements to return data within tight timescales. There is no threshold as to how many cases can be treated “on call”/ad hoc, however this is one aspect that The Pensions Regulator will monitor.
The Minister for Pensions has confirmed that the last connection date for schemes in scope will be 31 October 2026. A replacement staging timetable setting out when schemes should connect will be set out in guidance to be published later in 2023. We expect this to set out connection dates depending on the type and size of the scheme for schemes with, broadly, 100 or more members.
