Out-Law News 2 min. read
01 Jul 2022, 12:54 pm
Failure to comply with new guidance, issued by the UK Pensions Regulator (TPR) to help trustees meet their pensions dashboards deadline, will be “looked on dimly”, according to one legal expert.
Tom Barton of Pinsent Masons said the guidance “hammers home” the fact that “compliance is a trustee duty”. He added: “Trustees have to take responsibility for delivering the dashboard project by connecting to the dashboard ecosystem, matching requests with scheme members and returning value data to dashboards.”
His comments came after TPR warned that many trustees are at risk of failing to meet their legal pensions dashboards responsibilities. According to research conducted by the regulator, more than half (51%) of defined contribution (DC) schemes and one third (33%) of defined benefit (DB) schemes continue to hold non-electronic member records.
Just 4% of DC schemes and 9% of DB schemes have begun to digitise the information they hold in preparation for pensions dashboards. TPR added that less than half (37%) of schemes have discussed pensions dashboards at their trustee board meetings – or engaged with their administrators about their data.
Trustees have to take responsibility for delivering the dashboard project by connecting to the dashboard ecosystem, matching requests with scheme members and returning value data to dashboards
TPR said that, alongside digitising their data, trustees should also check their ‘connection deadline’ – the date by which they will be legally required to be connected to the pensions dashboards – and place pensions dashboards firmly on their board agendas. It told trustees to decide whether they will use a pensions administrator to connect to the dashboards, or whether they will develop a solution in house or an integrated service provider.
Barton said: “Non-compliance with TPR’s latest guidance will be looked on dimly. Though the £5,000 penalty for individuals – and up to £50,000 in other cases – will be familiar to trustees, these fines apply for any instance of a single compliance breach. So, if the breach is endemic the penalties could build up dramatically.”
He added: “This is a serious issue – and even more so given the recent publication of The Pensions Dashboards (Prohibition of Indemnification) Bill, designed to prohibit trustees from being indemnified in respect of such penalties. From a liability perspective, the Bill could leave those responsible for delivery of dashboard in a very difficult place indeed.”
Meanwhile, a new consultation on draft regulations, published by the Department for Work and Pensions (DWP), suggested the secretary of state would give trustees 90 days’ notice ahead of the ‘dashboard available point’ (DAP) – the date when dashboards will be available to all consumers after initial testing is completed.
Barton said: “In theory, dashboard connections should all be in working order for very large schemes by next summer, but in practice there will almost certainly be challenges. There’s a good chance of some teething problems at outset, because pensions admin does not yet exist in a helpful universal, digital, automated format. Any issues that persist after the DAP could undermine consumer confidence in the system before it ever gets underway.”
The DWP also proposed giving the Money and Pensions Service (MaPS) the power to share information with TPR to enhance ITS governance of the pensions sector. Barton said: “It is broadly logical for these two organisations to be able to speak to each other because the information they each hold is relevance to their wider functions. While concerns about data protection and other legal restrictions have been addressed in the draft regulations, the change is largely about allowing information sharing which might have been expected anyway – in the same way that TPR can share with the Financial Conduct Authority.”
TPR has called on trustees, scheme managers and administrators to attend a pensions dashboard webinar on 28 July at 2.30pm.
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