Trustees will be familiar with the concept of pensions dashboards, the new online platforms which will allow people to see information about all of their pensions in one place. Most will also be aware of the new duties that will apply to them in relation to dashboards, with the largest schemes being required to connect to the dashboards infrastructure established by the Money and Pensions Service (MaPS) from August 2023. But how many know about the proposed regulatory regime for the providers of pensions dashboards, and why should they care?

Why do trustees need to know about the regulation of dashboard providers?

To answer the second question first, the key point is that schemes will be required to provide members with information about their pensions through the dashboard of the member’s choosing, whether this is the dashboard provided by MaPS or a dashboard provided by a third party entity. Once the data is provided to the relevant dashboard, it will be outside the control of the trustees: trustees won’t be able to dictate how the information is presented to their members or what happens to the data after is has been provided to the dashboard. 

This may give rise to a number of concerns from a trustee perspective. Will the information be presented in a way which can be understood by members (and in particular, in relation to information relating to DB benefits, will it be clear to members that it is an estimate and does not confer any rights or entitlements under the DB scheme)? Will members be encouraged to make poor decisions or be at risk of scams? Will trustees face a deluge of queries from members confused about the information presented on the dashboard? Are trustees at risk of complaints about dashboards? 

Understanding the regulatory framework within which dashboards will be required to operate should help trustees understand how the information they send to dashboard providers will be displayed and how that information can be used. 

How will the providers of pensions dashboards be regulated?

The Government has confirmed that it will be amending the relevant legislation so that any entity (other than MaPS) that wants to operate a pensions dashboard service will need to become FCA authorised and get the regulatory permission to carry out this specific activity. The FCA has published a consultation paper setting out its proposed regulatory framework for dashboard providers. It covers the FCA's approach to supervision and enforcement for dashboard providers, including details on fees, regulatory reporting, record keeping, prudential requirements and conduct rules.  It also covers the regulation of post-view services (i.e. what additional services pensions dashboard service providers might be able to offer individuals, which goes beyond the initial concept of “find and view”).

Alongside the FCA consultation, the Pensions Dashboards Programme (PDP – the part of MaPS responsible for pensions dashboards) has published a consultation on design standards for pensions dashboards. The aim is to ensure that information is displayed in an engaging, accessible and inclusive way, whilst also being presented in a clear and comprehensible manner.

Key points for trustees to note from the consultations include the following:

• Disclosure, signposts and warning: It is proposed that dashboard providers will be required to disclose certain information, signposts and warnings. This includes warnings about the limitations of “view data”, including that figures are indicative or estimated and not guaranteed; that assumptions have been used to calculate figures; that figures may change and may be influenced by changes in investment performance, contributions and the date the member decides to take their pension; that view data is supplied for illustrative purposes; that more up to date figures and more details may be available from the scheme; and that some pensions may not be displayed on a dashboard (e.g. if the scheme is not yet connected or if the member has already started taking their benefits). It is also proposed that dashboard providers will be required to discourage members from making financial decisions based only on view data and signpost members to appropriate sources of information, support and guidance (including contacting the scheme if they want more information about their pension).
• Outsourcing and “white labelling”: Dashboard providers will be able to involve third parties in bringing dashboard services to market e.g. through outsourcing or by making dashboards available to consumers via third parties (including white labelling, licensing, syndication or third‑party hosting). The dashboard provider will not, however, be permitted to delegate any part of its regulatory responsibility to a third party and will remain responsible for complying with all regulatory responsibilities.
• Data export: It is proposed that it should only be possible to export data to the member themselves, the dashboard provider, or a firm in the same group as the dashboard provider with permission to give investment advice, and specific requirements in relation to each are set out in the consultation document.
• Post-view services: It is proposed that dashboard providers will be able to offer additional services beyond the “find and view” of the core dashboard, such as advice (including robo advice), guidance, modellers, calculators or similar tools. Details of the proposed conduct rules that will apply to providers offering such services are set out in the consultation document. 
• Marketing: It is proposed that dashboard providers will be subject to restrictions on their ability to advertise other products or services via the dashboard. 
• Complaints: The consultation document recognises that many parties will be involved in processing each member’s request to find and view their pensions, and explains that the PDP is developing a central user support service to help members identify who might be able to consider their particular issue. Complaints about the acts or omissions of dashboard providers will come within the jurisdiction of the Financial Ombudsman Service.

Both consultations closed on 16 February 2023. The FCA intends to publish a policy statement and finalised rules in summer 2023, with a view to opening the authorisations gateway shortly thereafter. The PDP is also aiming to issue the final design standards in or around summer 2023.

Overall, the proposed regulatory framework for dashboard providers should reassure trustees that information will be presented to members with adequate warnings and that there will be appropriate limits on the way in which member data can be used. However, there are some aspects that we hope to see improved in the final version. For example, the warnings seem to be more focussed on defined contribution arrangements than defined benefit arrangements. It would also be helpful to have more detail around the proposed process for resolving complaints, especially in cases where a complaint is made to the trustees but is actually about the dashboard and where the complaint therefore falls within more than one regulatory regime.