Pension dashboards: Key issues for 2024

Accurate data will be crucial for the success of the dashboards project. And with guidance on connection dates recently published, work on getting data ‘dashboards ready’ should already be progressing.

Those overseeing dashboard projects will likely have delegated the bulk of data readiness work to their administrator’s team. However, there are some data-related decisions where trustees should expect to be asked for their input.

Four key dashboards data questions will need to be addressed in 2024.

1. Scheme-specific value data decisions

Historic decisions on scheme design have meant that many schemes – typically defined benefit (DB) – may have complex benefit structures.

Trustees of schemes with features like underpins, bridging pensions, ongoing salary linkage and multiple payment ages should expect to engage with their administrators over the course of the year on how value data for these structures will be calculated.

The Pension Administration Standards Association’s (PASA) excellent 2023 guidance on dashboards value data sets out key considerations for trustees to consider.

However, in many cases, scheme-specific adviser input may also be needed to understand which option is right to adopt. Early engagement with administrators will ensure that any necessary automation work can then be completed in time.

1. Multiple providers and keeping illustration dates aligned

Many schemes make use of more than one provider. For example, schemes may be a hybrid of DB and defined contribution (DC) with separate administrators. Other schemes may have multiple external providers for additional voluntary contributions (AVC).

The dashboards legal framework presents a potential challenge for these schemes, as it requires value data to have the “same illustration date”.

This could raise compliance issues. For example, where one legacy AVC provider calculates value data on a ‘live’ basis – as at today’s date – and a second legacy AVC provider calculates value data at a fixed illustration date in the past year. It may be that neither provider is willing or able to change its systems to show value data at the same date as the other.

Schemes encountering this challenge could consider engaging their legal advisers to understand the risks and options available, as well as keeping a watching brief to see if any future regulatory guidance addresses this tricky area.

1. Manual calculations for value data

Many schemes are expected to be able to automate their value calculations but for some schemes this may not be a feasible option for a particular category of members. Automation work could be too expensive, or the number of members may be too small to make automation cost-effective.

The dashboards regulations allow schemes to do manual calculations (“on call”) within 10 days for non-DC benefits where no statement or calculation has been prepared in the past year. The 10-day clock would start at the point a positive match is made. This gives schemes that haven’t automated benefits some leeway on timing once a member first successfully connects to the scheme.

However, the law doesn’t envisage any scenario where a member makes a subsequent view request in years two, three or onwards into the future.

It is hoped that future iterations of the data standards will make clear that DB schemes will still be able to rely on the 10-day window for manual calculations in future years, but again this is one for schemes to monitor.

1. Using ‘find data’ to improve scheme records

Many trustee boards are planning to set matching criteria based on fairly narrow (but reliable) data items, principally National Insurance number, date of birth and surname.

However, schemes will be receiving a much broader dataset within “find requests”, including verified current address, mobile telephone number and email address.

High volumes of find requests could present schemes with a potentially unique data cleanse opportunity, allowing schemes to update their member records with this second-order information upon a successful match.

The Society of Pension Professionals (SPP) Legislation Committee is undertaking work to confirm whether this type of data cleanse would be technically possible within the confines of how providers are constructing their dashboards connectivity. Thought will also be required as to the legal questions that this would raise. Again, this is an area to monitor over 2024.

Next steps

These dashboard data issues and others may require trustee input.

Delegating dashboards governance to appropriate decision-makers will allow schemes to move as swiftly as possible as connection deadlines begin to approach, and as further clarity emerges in some of these areas.

Oliver Topping is a member of the Society of Pension Professionals’ legislation committee and a partner at Sackers