By Nina Blackett, Interim Executive Director of Strategy, Policy and Analysis at TPR
We believe in that vision, and we will do what we must to deliver it.
That’s why this week we set out how we expect trustees and scheme managers to comply with their pensions dashboards duties, and the action we’ll take if they don’t.
Our goal is to help schemes take the right steps now, so they are ready with the right data, ready for the dashboards switch on, ready to help make a significant impact on the saving outcomes of millions of people.
If schemes prepare properly then we are less likely to use enforcement action to ensure they do the right thing. Act now, so we don’t have to.
Our compliance and enforcement policy should not be seen simply as a regulatory stick. This policy demonstrates that our approach is risk-based and proportionate, but is clear on the potential penalties for non-compliance.
Before we know it, pension dashboards will result in a huge wave of savers interacting with their personal data. Failure to meet your duties is therefore not an option.
If we reach the stage of having to use our powers against the trustees or scheme manager of a scheme, it means savers are already at risk of not getting the full picture of their retirement savings. Neither we nor the industry would want that to happen.
We know many schemes are getting ready to connect in the right way, with the right data. But it also cannot be right that with the connection dates approaching, there are still some schemes not measuring their data or trying hard to improve it.
That is why we will be engaging with hundreds of schemes this autumn, asking them to account for how they are measuring and improving their data. We may take regulatory action where trustees or scheme managers are failing to meet our expectations.
Next steps
So how should trustees and scheme managers prepare. The steps are simple.
Read the guidance – knowing your duties is the first step. In particular, we will expect trustees and managers to be able to demonstrate their ‘having regard’ for the Department for Work and Pensions (DWP’s) connection guidance.?This is not just about meeting TPR’s expectations, but also complying with the law.
Plan to connect in a staged and orderly manner in line with DWP guidance. Schemes face increased risks of non-compliance and reputational damage if they don’t connect promptly.
Manage resource according to your plan. Trustees must establish robust controls and contractual agreements when selecting and managing service providers.
Data rules
Ensuring that data is robust and accurate is an absolutely essential underpinning principle for schemes as they prepare for their connection to dashboards. And so, our guidance is clear that schemes must have robust governance and controls in place.
As a regulator, we are transforming into a data-led and digitally enabled organisation. We will make data the backbone of decision-making.
We want schemes to do the same. How?
Review and improve the quality of member data: Neglecting data maintenance leads to poor quality and unreliable information.
Manage risk: Identify, evaluate, and record risks, and put controls in place. Neglecting this can lead to compliance issues.
Review and adjust: Trustees need to continuously review and improve controls that are in place, adjusting where needed.
Keep robust records: Trustees and managers need clear records (of decisions made and advice received) and to receive regular reports.
Report and mitigate breaches promptly: This will reduce the risk of further harm to the scheme and possible regulatory action from us. Trustees and scheme managers must have processes in place to identify breaches and report them to TPR as necessary.
We are laser-focused
So, what does all this mean for schemes as they prepare for dashboards. In short, it means trustees must be ready in terms of their record keeping, risk management and the quality and administration of their scheme’s data. Our compliance and enforcement efforts will focus on where we see behaviours or breaches that endanger savers’ access to complete or accurate pension data. Examples will include schemes failing to find a pension for a saver, returning data to the wrong saver (or inaccurate data to a saver), and failure to connect on time or stay connected, in accordance with the regulations and MaPS standards.
Timely action is essential. Trustees and scheme managers must grip their obligations diligently and work closely with their providers to avoid the pitfalls of last-minute risks. We expect third parties to support schemes with these tasks.
Compliance is not a one-off activity and can’t be rushed. Our preparation checklist is a helpful tool to keep on track with duties.
We will carefully monitor and identify any risk of non-compliance. But we hope that for most, enforcement is not required. Instead, we encourage schemes to do the right thing now, and help savers reach the outcomes they deserve.
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