By Jonathan Hawkins, Principal Consultant & Pensions Specialist at Bravura
The Financial Conduct Authority’s (FCA) final rules and guidance document (Pensions Dashboards rules for pension providers) was published yesterday (1 Nov, 2022) and it included some interesting nuggets. Here are our top four takeaways:
Timeline for connecting to the pensions dashboards ecosystem
The policy statement confirms what many of us who have been closely following pensions dashboards have been expecting for some time: FCA regulated providers must have a plan to connect, by and large, by the end of August next year.
However, this may not apply to the small end of the market (now classified as schemes with fewer than 5000 pots in accumulation), as there are various waivers schemes could use to defer their connection date up until 31 October 2024. While this is seemingly good news, access to the waiver will likely be limited and will only fit certain providers and there’s no guarantee that even if a provider applies, it will be accepted as it seems the FCA may be treating waivers on a case-by-case basis. It’s therefore imperative providers continue to make provisions to get their data connected to the pensions dashboards central digital architecture as soon as possible.
Conversely – at the larger end of the market – legacy providers or providers of multiple types of scheme or product may find themselves skipping quite far forward now the FCA has clarified how the MaPS Code of Connection relates at the provider level, not the level of the underlying personal or stakeholder scheme. This may have far-reaching consequences and escalate their timeline quicker than expected leaving many to divert yet more resources into everything from data cleansing to identifying an ISP (Integration Service Provider) to connect to the pensions dashboards ecosystem.
Data matching for pensions dashboards
It’s fantastic to see the use of the 30-day limit for resolving a partial match, as this will mean stale partial match data is not retained indefinitely – following best practice for data stewardship. In a similar vein, we’re also buoyed to see the work undertaken by the Pensions Administration Standards Association (PASA) on data matching conventions has been recognised by the FCA.
Benefit information and signposting on pensions dashboards
Another useful easement is that hybrid benefits can have a level of discretion that are granted to them so that the trustees can make the best appropriate choices with regards to values that are presented to members on pensions dashboards in the case of complicated benefits. We agree that the best place to get the ‘full story’ on complex DB and Hybrid benefits is the administrator, and the dashboard should give a good indication of what the benefits will be and explain that for the full benefit breakdown, the dashboard user will need to go and find some additional information from their administrator. We see this is generally beneficial because it is signposting the individual to the pension provider but is also giving them a relatively useful outline of what that benefit would be; not to mention the massive benefit of reconnecting that user with the scheme.
ISP – an Integration Service Provider of scale and experience
One particularly interesting statement that jumped out within the document is the worry of providers and the FCA that ISPs may struggle with capacity.
As an ISP with proven scale and international credentials that is trusted in handling a huge number of data messages every single day and more real-world experience than most in the market (did we mention that in the UK alone we process over £1trn of financial messaging for our clients, including major global banks) – we don’t see that there’s going to be a problem with demand, particularly if you choose the right scalable ISP.
Learn more about our ISP or get in touch to arrange a demo and find out how we can help you take the stress out of connecting to the ecosystem with our secure and scalable ISP, Dashboards Connect.
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