Smaller pension schemes, some of which are still to connect to the pensions dashboards ecosystem, should now be looking beyond connection in their dashboards preparations, Lumera, a leading insurtech company, has warned.
This is because these schemes can face disproportionate pressures compared with their larger counterparts – often lacking dedicated project teams, specialist data functions and administration capacity despite needing to meet the same requirements once connected.
For example, some in-house administered schemes rely on only one or two individuals responsible for all day-to-day administration.
The increased challenge for smaller schemes is reflected in The Pensions Regulator's latest Pensions Dashboards Readiness Survey, which reported that 65% of schemes surveyed, which were schemes with between 600 and 999 relevant members, had completed all five key preparation activities around 11 months before their ‘connect by’ date, compared with 79% of schemes with more than 20,000 members.
The key preparation activities that schemes were asked about were regularly tracking progress at board meetings, discussing preparations with administrators, choosing a route to connection, having digital personal data, and having confidence in the accuracy of this data.
Lack of confidence in data can make it much more difficult for schemes to support dashboards after connection. For smaller defined benefit schemes in particular, deferred pension values are not always recalculated annually, meaning new calculation processes or automated technology may be needed to produce dashboard-ready values if schemes do not want to rely on carrying out calculations ‘on demand’.
Once dashboards are used more widely, then the associated support activities will need to scale up. These include the need to investigate possible matches, provide pension values within statutory timescales, maintain member records, respond to increased enquiries and monitor ongoing performance and compliance.
For smaller administration teams, even modest volumes of dashboard-initiated requests could disrupt day-to-day operations.
Poorly designed matching criteria can add further pressure, either preventing genuine members from finding their pensions or generating unnecessary manual investigations through false matches. Likewise, relying on manual ‘on demand’ pension-value calculations risks creating operational bottlenecks and delaying responses.
With live testing of the MoneyHelper Pensions Dashboard starting to ramp up, and its public launch date currently expected in the next financial year, smaller schemes should be joining their larger counterparts in completing end-to-end testing of their dashboard processes, validating member data and matching criteria, and ensuring pension values can be produced accurately within statutory timescales. Schemes that postpone this work risk creating avoidable operational backlogs and a poorer member experience.
Maurice Titley, Commercial Director, Data & Dashboards at Lumera, commented: “Small schemes face a double challenge - getting connected with limited resources and then managing the operational demands when pensions dashboards are used at scale by the public, which is expected to start with the launch of the MoneyHelper Pensions Dashboard (MHPD) in the next financial year.”
"While the priority, understandably, has been to connect to the pensions dashboards ecosystem ahead of the 31 October legal deadline, the focus now needs to shift to addressing data weaknesses ahead of public availability. The schemes that adapt most successfully to the post-dashboards world will not necessarily be those with the ‘best and biggest’ resources, but those that have taken the time to understand their data, test their processes and put proportionate controls in place before their members begin using the service.”
"Although dashboards introduce new obligations, tackling data issues now will help schemes avoid operational bottlenecks when the MHPD goes live, and create stronger foundations for longer-term priorities, including consolidation, buyout and other strategic options."
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