DWP has consulted the industry informally about managing the next stage of the programme. Expect to hear more soon.
The DWP has been conducting informal consultations in order to issue amendments to legislation before the summer recess to keep the again-delayed project on track.
The department has proposed a change in the legislation that removes the staging dates, with the possible exception of a backstop date for all schemes to be compliant by, probably in 2025.
Instead of having staging dates with hard deadlines, the dates would be ‘soft’ and entered in to the guidance notes.
Single point of failure
A single deadline was condemned as “madness” and “carnage” by a number of industry professionals. However, it is thought that schemes may retain the same staging profile and be expected to work towards them.
DWP and TPR are said to have warned that schemes must have regard for the guidance and failing to stage would require an explanation. But it does beg the question, said one expert, whether dates covered by guidance are enforceable.
One senior industry professional, said: “There are plenty of other data jobs on that are taking up scheme resources, such as GMP, so nobody will be kicking it into the long grass just for the fun of it.”
Unintended consequences and capacity crunch
Even if master trusts begin connecting later this year as they had planned to do from August, scheme trustees may decide to defer, if they consider –or receive advice that – it is not as important as other projects. This has potentially disastrous consequences for the project.
By delaying their staging, DB schemes would increase the chances of finding a bottleneck when seeking an integrated service providers (ISP) to plug them into the dashboard programme’s infrastructure.
Worse is the possibility that some ISPs or other service providers may decide that they are unwilling or unable to keep funding a delayed project and simply pull out, reducing market capacity further.
Capacity has long been a concern, with so many data projects currently underway, one industry professional told Pensions Expert.
This is likely to worsen, and may create a worst case scenario estimate of anything up to 10 times the demand previously experienced for integration work.
Another expert suggested that while there will be the need for more development work, he is confident his business can manage the initial strain. But there are other consequences that could harm the market as a whole.
“While it doesn’t necessarily need to cost a lot of money to keep the project open,” he said, “it damages our business plans for the next year because we had scheduled business on the back of the dashboard programme.”
Unnecessary complication
One thing is certain. If capacity is drastically reduced, schemes will find the staging process extremely expensive.
However, one industry expert said he was hopeful that because of the number of data projects being done by administrators now, many schemes may find they are “there, or there about” by the time they approach their staging date.
Another thought it ironic that the DWP officials in consultation suggested that if the dates were in guidance, then schemes could stage earlier if they chose to.
“That is flexibility that wasn’t asked for,” he said. “So, the government will put through the changes, set fire to the industry and see everybody run around to jump through DWP’s hoops.”
And without knowing what the Money and Pensions Service’s (Maps) onboarding process will be like, it will be very difficult for schemes to be ready to stage even if they have all their data sorted.
He added: “Perhaps schemes will be asked to prove they are ready by a certain date and then they can start queuing in order to be onboarded.”
Another added: “Ultimately, the government will do what is good for the government.”
A DWP spokesperson said: “We will provide further information in due course” and highlighted the minister’s statement from 2 March, which announced the recent delays.
