The pensions industry has warned that the Department for Work and Pensions (DWP) is “missing the point” in its latest pensions dashboards consultation, warning a 90-day notice period could present “real challenges”.
These regulations included the requirements to be met by dashboard services and their providers, and the requirements on trustees or managers of relevant occupational pension schemes in relation to co-operating with, and connecting to, the Money and Pensions Service (Maps) and the data they must provide to individuals via Maps.
Also, the draft included provisions for The Pensions Regulator (TPR) to take enforcement action in relation to pension schemes that do not comply.
Today's further consultation relates to two additional specific matters - the dashboards available point and the disclosure of information between Maps and TPR.
The DWP proposed that provision for the dashboards available point will outline that dashboards services will become available for use by the public from a date specified by the secretary of state for work and pensions.
It is proposed that in determining the date, the secretary of state must be satisfied that the dashboards ecosystem is ready to support the widespread use of qualifying dashboards services, including consulting with Maps, TPR and the Financial Conduct Authority.
The DWP proposed schemes may have a 90-day notice period to the available point, which the government department suggested is "sufficient".
Lane Clark & Peacock (LCP) suggested the DWP is "missing the point" by not finalising the go-live date until certain conditions have been met in terms of coverage and evidence of user understanding.
LCP partner Steve Webb warned a sudden switch-on of dashboards "could cause huge headaches to pension schemes and providers and could also be a negative experience for users".
He suggested with a ‘big bang' switch on, the dashboard infrastructure could face a "huge surge" in demand, which would require greater capacity and resilience than would be needed for a more gradual process.
"The DWP is missing the point with this consultation," Webb warned. "The big issue which the DWP's latest consultation ignores is whether there should be a ‘big bang' switch-on of dashboards at all. 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."
He continued: "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 suggested the DWP giving potentially just 90 days' notice of a launch date is "full of challenges".
Head of pensions Kate Smith said: "The dashboards programme is graining momentum as we inch closer to April 2023 when schemes and providers will have to start connecting to the pensions dashboards ecosystem.
"But one jigsaw piece was missing - when the public will be able to access dashboards. The DWP is proposing a ‘big bang' launch date, potentially after giving only 90 days official notice, which is full of challenges.
"A 90-day warm up may work well for the public, but it 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."
Smith continued: "We want the public to have a good experience of dashboards from day one, not having to queue virtually to use it if they are caught in a log jam. 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 dashboards ecosystem doesn't fall over. This needs to be the priority after all the effort which has gone into building dashboards - to be successful, the delivery needs to work for all."
Hymans Robertson client manager for third-party administration Karl Lidgley noted the DWP's consultation provides "greater certainty", which is "most welcome".
However, he warned the 90-day goal "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.
"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 imbedded prior to a full market launch to minimise disruption and ensure the industry is ready."
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 the industry and other relevant stakeholders."
The DWP's consultation also covers the disclosure of information between Maps and TPR. The DWP said Maps will be privy to data and management information that arises from the running of the dashboards ecosystem that will be key for TPR to perform its compliance functions.
The DWP said the type of information to be shared relates to scheme data and data relating to dashboard processes, such as initial connected and registration data, ongoing connection status data, scheme endpoint data, contextual data, compliance data, and reporting materials that Maps will receive from pension schemes.
The government's consultation closes to responses on 19 July and the DWP said responses will help inform the drafting of the regulations.