- Pensions dashboard progress update
- PASA publishes guidance to improve the DB transfer process
- Accessing pension savings – the Government and FCA respond
- Pension Schemes Newsletter 138
- Royal Assent for the GMP Conversion Bill
Pensions dashboard progress update
The Pensions Dashboards Programme has published its latest progress report introduced by a short video presented by PDP Principal Chris Curry. The report summarises activity between October 2021 and April 2022 before going on to set out areas of focus to October 2022.
The report says that the project is moving forward at pace with work ongoing on the build of the ‘central digital architecture’, development of legislative and technical standards and research and testing to feed into the design and development of the service.
Key milestones met over the past six months include the selection of three potential commercial dashboard providers (Aviva, Bud and Moneyhub) to support the alpha testing phase of the programme and the procurement of an interim identification service (Digidentity) and successfully integrating this with the rest of the central digital architecture.
The areas of focus to October 2022 include further development and testing by the PDP of the central digital architecture, the DWP aiming to publish the response to its consultation in the summer and to lay regulations as soon as possible after this, with the PDP aiming to consult on its data, technical, reporting and design standards and the code of connection at the same time.
The Financial Conduct Authority is also aiming to finalise its rules around the time that the DWP regulations are approved by Parliament. The MaPS pensions dashboard is also being built and will be accessed on the MoneyHelper website. The Pensions Regulator, for its part, intends to contact trustees and scheme managers at least 12 months ahead of proposed scheme staging deadlines, to help them to prepare sufficiently and on time – with the first contacts being made this month.
A ‘progress insights’ blog has also been published. Amongst other things this acknowledges the first entrant to the integrated service provider (ISP) market, with the PDP in conversations with other possible market participants.
Comment
The message from this latest update is that the build of the pensions dashboard is on track. Given this, those pension schemes required to connect need to ensure that their own internal projects are progressing sufficiently well that they will be ready when their time comes to connect – which for the very largest of schemes is now only a year away.
PASA publishes guidance to improve the DB transfer process
After a long gestation the Pensions Administration Standards Association has launched its Good Practice Guidance on the DB transfer process. This brings to a close a process that was initially launched in July 2019, re-expressed in February 2020 (see Pensions Bulletin 2020/06) and then interrupted by the pandemic and the November 2021 changes to transfer legislation aimed at minimising scam risks.
The new Guidance has three objectives and is based around six principles, all of which are intended to result in a faster, safer and more efficient’ transfer experience.
Significantly, and in response to industry feedback, the Guidance does not set out specific timescales for tasks to be completed or lay down prescriptive processes to follow. Instead, it seeks compliance with principles that scheme administrators should be willing to work towards, to the extent that their processes do not already meet them.
These principles are given specific meaning when applied in the context of a transfer process, whose various stages are outlined in section 4 of the Guidance. An appendix sets out a template for a possible transfer acknowledgement communication, whilst a further appendix sets out four ‘considerations’ to improve member experience. This includes supplying an early retirement quote when providing transfer quotes for members over a scheme’s minimum retirement age, and looking to embed online ID verification processes to reduce the need for members to provide paper-based ID.
Comment
The objectives and principles set out in the Guidance clearly reflect a theme of prioritising members and their needs, but at the same time allow administrators the flexibility to adapt processes to fit their preferred operating model, provided the principles are followed.
It has been a long and difficult journey, going all the way back to a Treasury initiative in February 2016 (see Pensions Bulletin 2016/06), but this now final Guidance seems to be a much more appropriate means by which to improve the transfer experience within occupational pension schemes than the prescriptive approach that was once mooted.
Accessing pension savings – the Government and FCA respond
The Work and Pensions Committee has published the responses by the Government and the Financial Conduct Authority to the recommendations made by MPs in their report on accessing pension savings published in January (see Pensions Bulletin 2022/02).
The Government has rejected calls by the MPs to set a combined goal for those using Pension Wise and paid-for advice when accessing DC pension pots for the first time. It has also rejected the suggestion of a trial of automatic Pension Wise appointments and was non-committal on the subject of overhauling the Pensions Advice Allowance.
In responding to other points made by MPs, the Government says that:
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In May 2022 the DWP will be issuing a call for evidence on decumulation within DC occupational pension scheme provision, which will explore if trustees need new duties relating to decumulation, including whether there is a need to implement investment pathways
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It is holding discussions with interested parties about how collective money purchase provision might be extended beyond the single or connected employer schemes it is currently legislating for
It also seems that the call for evidence will cover wider issues relating to how occupational pension scheme members access their pensions.
Comment
The imminent call for evidence could be noteworthy, although going by recent DC policy experience, the DWP may have to progress cautiously from the evidence gathering phase to any regulation making.
Pension Schemes Newsletter 138
HMRC’s latest pension schemes newsletter covers eight topics, a number of which will be of interest to pension scheme administrators. However, many of the topics are little more than a reprise of ‘old news’.
The real ‘news’ in this newsletter comprises an announcement that HMRC has completed its annual update of its annual allowance calculator so that it includes the 2022/23 tax year, a promise to update the Pensions Tax Manual to reflect the recent Scheme Pays regulations, and some registration and pension flexibility statistics.
Royal Assent for the GMP Conversion Bill
As expected, the Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill completed its passage through Parliament, receiving Royal Assent on 28 April, shortly before the 2020/21 Parliamentary session was brought to a conclusion.
Regulations are needed to bring the now Act into force, with two important aspects awaiting consultation on the necessary detail by the DWP.
