Regulators have warned pension schemes it is “not acceptable” for them to be unprepared for the launch of new online tools designed to help savers see all their retirement pots in one place.
The Pensions Regulator (TPR) issued the warning to retirement plans serving tens of millions of savers, less than six months before they will start to connect members’ data to new pension dashboards.
The online tool — a work in progress since 2016 — is aimed at transforming retirement planning, enabling savers to see all their pension pots in a single hub, bringing together state, private and company pensions.
The project has been repeatedly delayed after schemes said they had not had sufficient time to prepare member data to feed into the dashboard.
This week the regulator said it would take a pragmatic approach to enforcing the new dashboard duties but act against those failing to prepare for the tool’s introduction.
“We have been talking to industry for several years about their obligations and schemes should already be looking at their data management, internal governance and how they will meet their obligations,” TPR said.
“We will be pragmatic in our approach to regulating dashboards compliance and will not be looking to simply issue fines. However, it is not acceptable for schemes and their administrators to do nothing, and we’ll take a dim view of wilful or reckless non-compliance.”
Under the dashboard timetable, schemes and providers will begin to be compelled to connect to pensions dashboard platforms from April, with a high level of coverage required by 2024.
While TPR already regulates trustees and workplace pensions, a key part of complying with dashboard obligations will rest with third parties, such as administrators, employers and integrated service providers.
New legislation enables TPR to issue third parties with compliance notices. If they do not comply, they face fines of up to £50,000 (and individuals up to £5,000) for each breach.
In a consultation issued this week, the regulator said schemes would need to find savers and return data as expected.
“In particular it is critical that schemes connect the right pensions to the right saver. We will be interested where a scheme is failing to find a pension for a saver when they should (failing to return a match made or a possible match), and when a scheme returns data to the wrong saver.”
BC&E, one of the UK’s largest workplace pension plans, said further discussions between the regulator and data providers would be necessary before the connection deadline next year.
“TPR’s outline approach is sensible and their emphasis on using their discretion and on proportionality in the proposed policy is welcome,” said Phil Brown, director of policy at B&CE, provider of The People’s Pension.
“All parties, though, are in the early stages of understanding how dashboards will really work once schemes have connected.”
Nearly 3mn pension pots, worth a total of £26bn, are lost or not matched to their owners, according to recent figures from the Pensions Policy Institute.