The PLSA has welcomed two consultations launched by the Financial Conduct Authority (FCA) and the Pensions Dashboards Programme (PDP) on the crucially important rules and standards for pensions dashboards that will impact what savers will see.
Much of the dashboards debate this year has been on schemes' compliance with the new regulations and data standards, so we're pleased to see the spotlight now turning to the saver experience too.
These controls over dashboards, operating in combination, and together with the existing Qualifying Pensions Dashboards services (QPDS) requirements in the Department for Work and Pensions (DWP) regulations, will be crucial for ensuring savers are properly protected when they attempt to digitally find and view their pensions, once dashboards are launched. All steps of the process must be appropriately controlled, for example:
• Rigorous criteria to be met by organisations applying to FCA for authorisation as QPDS providers
• Thorough ongoing monitoring of QPDS providers, e.g. via reporting and statutory annual compliance audits
• Clear explanations of what savers can, and cannot, expect from dashboards
• Clear handovers between dashboards and the Government's central digital architecture, including the central digital identity verification / authentication service and the central consent & authorisation service
• Unambiguous processes to resolve Possible Matches when a scheme is unable to return a Match Made
• Very simple and straightforward display standards which enable savers to understand both the limited pension information shown, and the fact that for more detailed information and options they must still contact their different pension schemes and providers directly
• Defined and structured onward journeys for savers who wish to take further steps after using a dashboard
• Strong controls on the usage of any pension information exported from dashboards
• No marketing allowed alongside dashboards.
The PLSA believes that once the FCA and PDP have settled final rules and standards in the summer of 2023, it will be essential for these to be thoroughly tested in practice – with real savers – viewing their real connected pensions. This extensive user testing will either ratify the efficacy of the QPDS rules and design standards, or indicate where they need to be refined prior to the widespread launch of dashboards. The PLSA expects this testing to last until at least summer 2024 and quite possibly to the winter of 2024.
Nigel Peaple, Director Policy & Advocacy, PLSA said: “The publication today of draft rules and standards which Qualifying Pensions Dashboard providers must adhere to are a welcome next step towards making dashboards a reality. Industry and consumer groups will need to assess the proposals in detail before feeding back on the consultations.
“However, it is essential that dashboards are safe for savers so, now, more than ever, everyone should focus on doing dashboards well rather than quickly. Even after the new rules and standards are settled in the summer of 2023, extensive user testing will be required to ensure they work in practice. We anticipate at least 12 to 18 months' of user testing will be needed from the summer of next year before Dashboards can be launched to the public."
Jon Pocock, Pensions Dashboard Delivery Manager at Broadstone, said: “Pensions dashboards have the power to improve consumer engagement with their pensions and encourage them to start thinking earlier about the income they will need in retirement. However, providing the mechanisms for dashboards could leave the individual vulnerable to harm unless the regulatory framework is robust and balanced.
The FCA consultation on their proposed regulatory framework provides potential dashboard providers, pension providers, schemes and other interested parties the opportunity to provide views on how those controls should be established. Alongside the design standards that the Pensions Dashboards Programme is developing, the framework should provide clarity on what dashboards are permitted to do with the data provided and ensure consistency between different dashboard providers. This is critical to give schemes confidence on how individuals will see information and how it is being utilised.
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