The industry has done its bit

In this first half of my update on Pensions Dashboards, I will have a look at how the various aspects of the pension industry have got on with meeting their requirements.  The part that Richard Smith calls the bottom of the egg timer. 

As a very quick reminder the regulatory obligations on Pensions Providers, Schemes and their Administrators was to make all of the pensions available to the Pensions Dashboard Service by the end of October this year.  With guidance “strongly encouraging” the schemes and providers to connect from April 2025 onwards based on size.

In summary it’s going pretty well actually.  As of 10 December (the last date the PDP gave figures, I just checked) :

• More than 60 million pots have been connected.
• That’s over 75% of pots
• 700 schemes have connected

This will have moved on already and I would be surprised if its not 80%+ of pots by now as the January staging date has passed and December and January were a chance for some schemes to catch up. 

What has struck me in particular is how few schemes have looked to defer or miss their guidance date.  Trustees and administrators have done their best to meet the dates despite the challenges that this represented.  I think it’s worth remembering what these challenges were.

Create a New IT service

In order to connect members to the service schemes need systems to actually connect to the API and send the data in the right format. Also in most cases, store the data itself securely and in a manner that makes it accessible 24/7/365 in a matter of seconds. 

Some firms built their own service but the majority of them used commercial 3^rd party service such my old pals at Fusion (hi Maurice and team)  or Heywoods.   Let me tell you this was quite a ride as connecting to a brand new system is never easy.  Especially with a fixed deadline and delays on standards sign offs. 

A lot of work was put in across the various teams connecting, testing, signing off and going live in a tight timeframe in early 2025.  Congratulations to all those involved. 

Getting the data ready

Pensions Dashboards put new obligations on schemes, especially in the DB sector.

Matching rules meant a step change in data quality concerns for areas such as Date of Birth and National Insurance Number.  A lot of rectification work has already taken place, but I expect this to be an ongoing process.  Especially as we see what matching really looks like for millions of people. 

There will always be ways to improve data quality and schemes and providers will need to be wary in this area of thinking  that “Dashboards is done”

Another real challenge for the DB world is that wholly new valuation calculations need to be produced for all pensions on an annual basis.  Many of these were previously produced on an ad hoc basis (by spreadsheet)  and now needed to be automated on mass.   And remember every DB has its own fun little rules for this sort of thing so every scheme needs its own version.  With so many DB schemes knocking about that’s a lot.  

Progress here has been steady with many schemes already live with valuations data and the industry working hard to reduce the number of pots that will need any sort of manual calculation.

The last major challenge is that a lot more data than one might first think was held on old systems or even paper.  Getting this online was a major challenge that firms quietly got on with.  Yes, this probably should have been put onto systems years ago but the fact is a lot have been moved and more will over this year.

Working with each other

The biggest surprise to me over the last year was just how much effort was involved in working with the various other parties.  A DB scheme usually had Trustees who relied on their Admin providers, who used an ISP.  Then throw in the fun of engaging the various AVC providers a scheme may have picked up over the years.  It was rare for only one party to be responsible for delivering everything to ensure compliance.  

A personal anecdote if I may as AVCs was an area I was closely involved in.  Engaging with various AVC providers on behalf of the Scheme / Trustees was far more was far more involved than I had anticipated. Some schemes had up to half a dozen different providers, each with different ways of working.  But by and large different organizations found ways to work together to meet the regulatory requirements. 

Also a word here for PASA in particular, who did some great work on behalf of the industry.   They looked in detail at most of the implementation issues and provided really useful guidance.  In fact most organizations are following the PASA guidance for their matching rules. 

But we did it

Many commentators said the industry would not be able to do it.  Too many issues with data or DB schemes would not follow the guidance dates. 

And yet here we are on track to have all, or nearly all schemes,  connected to the Pensions Dashboard System in time for October this year.  With the vast majority of pots already connected. 

It’s not perfect but certainly good enough in my view for people to use pensions dashboards now. 

Unfortunately, almost nobody can actually use a dashboard yet. Which is incredibly disappointing. 

A subject my next blog will cover.