A second government consultation into pensions dashboards has been criticised over plans to give schemes just 90 days’ notice before the dashboards go live, with experts warning of a capacity crunch.
Launched on June 28, the consultation is designed to provide clarity in two areas concerning the dashboards. The first is the go-live date, known as the “dashboards available point”, and the second covers the sharing of information between the Pensions Regulator and the Money and Pensions Service.
It follows a previous consultation, launched in January, into draft dashboard regulations that was likewise met with criticism over the scale of the work it entailed for schemes, with the DWP’s insistence on both “find” and “view” functionality being available at launch deemed unfeasible by many industry commentators.
A longer lead in, say of six months, along with a government and industry-wide promotion campaign is needed to ensure the dashboard ecosystem doesn’t fall over
Kate Smith, Aegon
Schemes will have 90 days’ notice
The DWP acknowledged the feedback to its proposals in its new consultation, specifically the industry’s insistence that the dashboards available point be “carefully selected” and “be based on a range of criteria that have been carefully tested and goes beyond just achieving a certain level of coverage”.
It stated that evidence will to establish the dashboards available point will be drawn from private beta testing, "when the programme can test the service with invited users at scale”.
The industry also said it would “value more certainty around the DAP to ensure schemes are prepared for an increase in queries, can cope operationally, and can effectively manage communication to their members”, and that the eventual date should be agreed between the DWP, Maps, TPR and the Financial Conduct Authority.
The DWP also acknowledged the several respondents to the first consultation who questioned whether a phased, incremental approach to the launch might not be preferable to a single live date, leading the department to promise “a provision on the DAP within the pensions dashboards regulations”.
“We want to give pension schemes, prospective dashboard providers and members of the public a further opportunity to provide meaningful feedback on the proposal,” it said.
The department further committed itself to ensuring that the industry has “sufficient lead-in time” between the announcement of the DAP and the point at which it occurs, with the secretary of state’s announcement of the date serving as “a final confirmation”.
“We therefore believe 90 days’ notice is sufficient as the point at which a final confirmation of the DAP is made,” it said.
Launch date proposals criticised
Though the industry has long been broadly supportive of the intent behind the dashboards, the practicalities of delivering them and the DWP’s specific requirements have frequently met with criticism, and its plans for the launch date — or the DAP — are no exception.
The date itself is not expected to be finalised until certain conditions have been met, principally having to do with dashboards coverage, and the collection of evidence pertaining to user understanding and experience.
It is expected that the dashboards will go live at some point in summer 2024, though the DWP has yet to set a firm date.
The dashboards will first go through an extensive beta-testing regime, but the expectation from the industry is that the plan is for a “big bang” switch-on that could potentially give schemes as little as 90 days’ notice, which a number of industry experts have criticised for the unfeasible demands it entails.
Former pensions minister and LCP partner Sir Steve Webb said the new consultation was in danger of “missing the point” by not ruling out such a “big bang” moment, which he said would entail a “surge” in demand and require much greater capacity and systems resilience than would be needed for a more gradual approach to the go-live moment.
He added that, once all users are able to access the dashboards, it will probably lead to a flood of queries to schemes that may not have the capacity to handle them.
There is not capacity in the industry to deal with the extra member engagement that dashboards are likely to generate for administrators. Profitability is tight and resourcing to meet these needs, at 90 days’ notice, will be almost impossible in the current recruitment market
Karl Lidgley, Hymans Robertson
“DWP is missing the point with this consultation. The big issue which DWP’s latest consultation ignores is whether there should be a ‘big bang’ switch-on of dashboards at all,” he said.
“If the whole project goes live on a single day there could be a huge spike in demand, especially if the launch attracts widespread media attention. Pension schemes may face real challenges in dealing with all the follow-up queries and engagement from members.
“A phased approach, perhaps by age, would be much more sensible, allowing the whole system to bed in and proper plans to be made. As things stand, schemes may have just 90 days’ notice of a major call on their resources, and may find it very difficult to put in place the surge capacity to provide a positive user experience.”
Aegon head of pensions Kate Smith concurred, arguing that a 90-day lead-in “may work well for the public” but “doesn’t give the pensions industry time to gear up for any early surge in member queries”.
“Some schemes and providers will be more ready than others. But all will have to plan resources well in advance to deal with the public’s initial demand, which could be high due to promotion of the dashboards from the government and industry. There needs to be more join-up to understand how this will work,” she said.
“We want the public to have a good experience of the dashboards from day one, not having to queue virtually to use it if they are caught in a logjam. This could lead to disengagement, with some simply giving up or not returning.
“A longer lead in, say of six months, along with a government and industry-wide promotion campaign is needed to ensure the dashboard ecosystem doesn’t fall over. This needs to be the priority after all the effort which has gone into building the dashboards — to be successful the delivery needs to work for all.”
Karl Lidgley, client manager for third-party administration at Hymans Robertson, likewise warned that the 90-day window “does not provide enough scope in the current climate to match resource requirement to meet anticipated demands”.
“There is not capacity in the industry to deal with the extra member engagement that dashboards are likely to generate for administrators. Profitability is tight and resourcing to meet these needs, at 90 days’ notice, will be almost impossible in the current recruitment market,” he explained.
“We would encourage the DWP to work with providers, in a live environment, as part of a trial launch to make sure full testing takes place and effective functionality and timescales are embedded, prior to a full market launch to minimise disruption and ensure the industry is ready.”
Maps to play a key role
The consultation also laid out the important role to be played by Maps in sharing information with TPR, which it argues is essential given the regulator holds “key information to enable planning for implementation, will be supporting the secure onboarding of schemes, and [is] responsible for ensuring the compliance of pension schemes with their legislative requirements”.
It therefore includes draft provisions designed to empower Maps to disclose information to TPR in relation to the dashboards service in order that the two work together in the context of dashboard regulations.
The provision works both ways, similarly empowering TPR to share “restricted information” with Maps “in respect of Maps’ dashboard functions”.
Govt’s dashboard proposals cause widespread industry concerns
The Pensions and Lifetime Savings Association has recommended three thresholds that must be met before pensions dashboards are launched to the public, but there is widespread industry concern around liability for incorrect or misinterpreted information, and significant doubts whether its launch is achievable by the government’s preferred dates.
The DWP argued that such a provision “is in keeping with other disclosure provisions that are already in place for both bodies. For example, both TPR and Maps have express powers to share information with the FCA”.
“Both bodies will have governance measures in place to manage the flow of the information, access to it and use of it — in a similar way to how their current powers to disclose information are managed,” it continued, adding that the agreement will be published in due course.
A DWP spokesperson said: "Pensions dashboards will bring pensions into the digital age and we continue to work with key delivery partners to drive the project forward. All relevant announcements are – and will continue to be – sufficiently communicated to industry and other relevant stakeholders.”
