Financial Conduct Authority-regulated pension providers have been given an extra two months to comply with the regulator’s pensions dashboard rules on implementation.
In the final rules for the regulations published on November 1, the FCA said providers will now have until August 31 2023 for implementation, to align with the government’s extension to a deadline on occupational pension schemes. This deadline has been delayed from June 30 2023.
The FCA has also extended the connection deadline for providers with fewer than 5,000 pots in accumulation and who rely on a third-party integrated service provider to achieve compliance, to October 31 2024, as long as they notify the regulator by April 30 next year.
The City watchdog said this was due to concerns over demand for integrated service solution providers outstripping supply.
It will still be up to individuals to take the bull by the horns and combine their pensions with a single provider
Tom Selby, AJ Bell
Finally, the FCA highlighted feedback that some providers do not currently have information on costs and charges on certain plans available online.
Dashboards should help to address lost pots
To solve this, the rules now state that where information on costs and charges are not available online, the website must explain clearly to the consumer how they can find these details.
Aegon head of pensions Kate Smith, said the largest pension providers will be included in the first cohort alongside the largest defined contribution pension schemes connecting to the pension dashboard ecosystem, along with master trusts, as expected.
“The general public isn’t expected to be able to access pensions dashboards until the second half of 2024 and by then most pension schemes will have connected to the dashboard ecosystem, giving people a full picture of all their pensions online for the first time,” she added.
Earlier this year in its consultation, the FCA said the pensions dashboard rules will increase competition in the advice sector and offer consumers better value for money, as well as promoting informed decision-making about their pensions.
The pensions dashboard regulation will see the creation of a digital interface that allows savers to see all their lifetime pension savings in one place, with the data being retrieved directly from providers and updated in real time.
It is hoped this will promote engagement in pensions and highlight the importance of saving for retirement, as well as help to minimise lost savings.
These lost pots could be worth £26.6bn in total, according to the Pensions Policy Institute.
AJ Bell head of retirement policy Tom Selby said the issue of lost pensions has been exacerbated by a combination of auto-enrolment, frequent job switches and more people moving home, particularly during the pandemic.
“Each time someone changes job, they will likely get a new pension and risk losing track of their pot, or pots, from previous employers,” he said.
“Dashboards should help address this growing problem, although it will still be up to individuals to take the bull by the horns and combine their pensions with a single provider.”
The proposed rules require providers to search their records for matches immediately upon receiving ‘find data’ from the Pension Finder Service, part of the Money and Pensions Service digital architecture.
Pension providers will then be required to supply information to answer requests, and will have to maintain records for six years.
The rules were previously delayed due to a lack of data being ready to populate the dashboards.
Dashboard compliance a concern for the industry
Speaking at a Pension Playpen event on the morning of the FCA’s announcement, the Pensions Regulator’s business lead for pensions dashboards Lucy Stone said the watchdog’s compliance and enforcement policy has been signed off internally and will be published for consultation in the autumn.
“We’re going to be pragmatic,” she said. “We are going to be robust where we see wilful or reckless non-compliance. There’s no excuse not to try and do this effectively.”
Stone acknowledged concerns from the industry over capacity – in particular administration capacity.
Concerns were heard over dashboard compliance at an Invesco event on October 25, along with fears regarding the administrative burden that dashboards will place on schemes.
Aggregate value of lost pension pots surges to £27bn
Pension savers are being encouraged to take action to trace their lost pension pots, which in aggregate are estimated at £26.6bn, according to the Pensions Policy Institute.
Fines for non-compliance will reach £5,000 for individuals and £50,000 “in other cases for any instance of a single compliance breach”, according to TPR.
“I worry about dashboard compliance,” said independent trustee Ian Maybury.
“I worry even more about my ability to manage the flood of member communications that’s going to come post-dashboard,” he continued.
"It’s going to wake up an awful lot of people asking for an awful lot of work to be done that we haven’t done for decades, and I think could really stretch resources a lot.”
This article originally appeared on FTAdviser.com
