Government Pensions Dashboards rules forging ahead
His Majesty Treasury’s (HMT) qualifying pensions dashboard services (QPDS) enabling legislation comes into force
While there is still a little way to go before consumers are able to start using commercial dashboards to their full capability, this devlopment is an important step on the legislative journey to dashboards. It enables leading firms to start crystallising their plans. Developing a QPDS is a hefty undertaking, requiring around 3 years to develop, so those providers who have yet to start their journey towards delivering a QPDS need to start now.
We know from research that consumers want to be able to see all their pensions and wider financial universe all in one place, and that this is how businesses can achieve better outcomes for their customers. What’s more this is becoming an increasing priority for the government. Indeed, recently the Pensions Minister Paul Maynard emphasized his commitment to dashboards at the Pensions and Lifetime Savings Association’s annual investment conference, encouraging firms to ‘get their data ready now’.
Market-leading firms, like Standard Life have already committed and started working towards the delivery of a commercial pensions dashboard.; Today’s development gives them and others greater legislative certainty meaning they can push forward with their QPDS implementation plans, getting ready to submit their QPDS applications to the FCA as soon as the FCA opens its QPDS Authorisations Gateway.
Below is a summary of where we are in the pensions dashboard journey, and what we can expect next.
Commercial pensions dashboards are such a complex undertaking that they require four sets of rules to regulate them, from four different Government bodies:
Department for Work and Pensions (DWP) Regulations in December 2022 created the legislative framework for dashboards (this created the legislative requirements for commercial dashboards which are referred to as a Qualifying Pensions Dashboard Service, or QPDS) - relevant link: https://www.legislation.gov.uk/uksi/2022/1220/part/2/made
Now, 15 months on, HMT has amended its existing financial services secondary legislation by adding “Operating a QPDS” to the long list of regulated activities which are overseen by the Financial Conduct Authority (FCA). This HMT Statutory Instrument amendment comes into force today: 11 March 2024 - relevant link: https://www.legislation.gov.uk/uksi/2024/169/made
So that’s two done, with two to go: but what are they, and when are they coming? The final two pieces of the dashboards legislative jigsaw are:
The Money & Pensions Service (MaPS), through its Pensions Dashboards Programme (PDP), is going to publish a suite of Standards with which all QPDSs must comply. And all QPDSs must be audited by an independent expert every year to ensure they do, in fact, continually comply with all of the MaPS PDP Standards.
The MaPS PDP Standards for QPDSs include Design Standards which will ensure all QPDSs offer consumers the same, or a very similar, user experience. There are also numerous other PDP Standards which control how QPDSs must operate in conjunction with the Government’s Central Digital Architecture (CDA) ecosystem for dashboards and data providers.
The fourth and final legislative element for QPDSs are the detailed FCA Authorisation and Conduct of Business (COB) Rules. These will cover what nascent QPDS providers must do in order to be authorised with PDS permissions by the FCA. The QPDS COB Rules will cover what providers are allowed to do with their QPDSs, for example, Rules on what providers are allowed to do with the data about customers’ different pensions after they have found their pensions by using a dashboard.
Shortly after that, the FCA will open its Authorisations Gateway to start accepting applications from firms to become FCA-authorised as QPDS operators.
Once FCA-authorised, a QPDS can be connected by MaPS PDP to their CDA, to enable extensive end-to-end system testing to commence.
We're already working with leading providers to develop their dashboard offering, and deliver pensions clarity to consumers.
“It is more important than ever that people understand their pension information to prepare for financial security in later life.
That is where dashboards come in. They are critical in my view and have the potential to change how savers plan for their retirement by allowing customers to view their information including the state pension, all in one place, online."
While it might seem worth waiting until final rules are announced, developing and launching a QPDS is an incredibly lengthy project, and it’s imperative that firms start right away if they’re looking to offer a dashboard to their members.
It is too big a risk to wait. Leading brands like Standard Life have recognised the impact great pension dashboards can have on their customers today and also the clear direction of travel the FCA is driving around better outcomes for the consumer.