Guidance

Pensions Dashboards: guidance on deferred connection

Updated 2 February 2024

1. Background

1.1. Pensions Dashboards

Pensions dashboards are an electronic communications service, that will revolutionise the way people interact with their pensions by allowing individuals to see their pensions information, including the State Pension, in one place online – at the touch of their laptop, smartphone, or tablet. Dashboards will help individuals to be reunited with lost or forgotten pensions and support people in better planning for their retirement.

2. Purpose of this guidance

2.1. Relevant legislation

Sections 238D – 238G of the Pensions Act 2004, as inserted by Section 119 of the Pension Schemes Act 2021.

The Pensions Dashboards Regulations 2022 (referred to as “the 2022 Regulations”).

The Pensions Dashboards Regulations 2022 have been amended by the Pensions Dashboards (Amendment) Regulations 2023. References to the 2022 Regulations in this guidance are therefore in reference to the amended version of those Regulations.

2.2 About this guidance

The Government has set out its plan to enable the functioning of dashboards by requiring relevant occupational pension schemes to be connected to a dashboard digital architecture (referred to as connection to the Money and Pensions Service within the 2022 Regulations). Relevant occupational schemes have 100 or more relevant members (these are active, deferred, and pension credit members). A scheme is not considered to be a relevant scheme if:

• its main administration is based outside of Great Britain;
• it is not registrable with The Pensions Regulator (except for public service pension schemes); or
• the pension scheme is a public service pension scheme which is registrable but which relates to persons referred to in regulation 3 of the Civil Service (Other Crown Servants) Pension Scheme Regulations 2016.

The 2022 Regulations include a connection deadline of 31 October 2026, by which time all relevant schemes should have completed connection.

The 2022 Regulations also allow applications to be made by trustees or managers of relevant schemes in some specific circumstances to defer connection of the pension scheme to the digital architecture by up to 12 months. The requirements relating to applications for deferral of scheme connection are set out in regulation 17 of the 2022 Regulations.

The Secretary of State for Work and Pensions is responsible for considering these applications and this guidance has been produced to aid understanding of the application process.

2.3. Who is this guidance for?

This guidance is for trustees or managers of relevant occupational pension schemes and their advisers. It sets out the issues trustees or managers should consider if they are applying for a deferral of the connection deadline.

2.4. The legal status of this guidance

This guidance is provided for the purposes of assisting trustees or managers with applications to defer connection. Trustees or managers are not required to have regard to it, but are encouraged to do so, if they are considering making such an application. Although the Department for Work and Pensions (DWP) has done its best to ensure that the guidance provides useful information, it is not designed to detail every circumstance. Ultimately it is the legislation which takes precedence and trustees or managers should also refer to the legislation itself (see 2.1 above).

However, it is particularly important that trustees or managers have regard to any guidance on connection issued by the Secretary of State, The Pensions Regulator, or the Money and Pensions Service (either separately or by at least two of them jointly), as set out in regulation 15(2)(d) of the 2022 Regulations.

3. Deferred connection

3.1 In what circumstances can an application for deferred connection be made?

The 2022 Regulations allow trustees or managers of relevant occupational pension schemes to apply to defer connection of their scheme by up to 12 months if they can provide evidence to show that, before 9 August 2023:

• they had embarked on a programme to transfer the data held by the pension scheme to a new administrator; and / or
• they had entered into a contract containing an obligation to retender the administration of the scheme and the timetable for this is reasonable and conflicts with the connection deadline.

These are the only reasons that an application to defer connection can be made.

The trustee or manager will additionally need to provide evidence to show that complying with the connection deadline:

• would be disproportionately burdensome; or
• would put the personal data of members at risk.

This means that changing administrator alone would not be considered sufficient reason to defer connection beyond 31 October 2026. In some cases, for example, it might be reasonable to connect with an existing administrator and manage the change in administrator post-connection. Applications will therefore need to demonstrate how they are affected by the additional criteria above.

It is DWP’s primary objective to ensure that pensions dashboard services are made available for use by the general public at the earliest opportunity. Therefore, it is expected that work by a pension scheme to change administrator should be carried out in an efficient way and consideration should also be given to any connection guidance issued by The Pensions Regulator, the Money and Pensions Service, or DWP. All applications for deferral must therefore set out the steps being taken to ensure that the pension scheme can connect to the dashboard digital architecture at the earliest opportunity.

Permission to defer connection can only be granted once. Therefore, if permission has been granted to defer the connection of a scheme, no further applications can be made.

If an application is not permitted, this would not prevent a further application being made, although note further information under section 3.3 about the deadline for making an application and section 3.6 in relation to reviewing decisions.

3.2. How will DWP consider applications?

The Secretary of State for Work and Pensions will review all applications objectively based on the evidence that is submitted against the statutory criteria set out in the 2022 Regulations. The review of applications will be a robust process and the Secretary of State will not grant permission for applications that do not include sufficient supporting evidence. The Secretary of State may also consider systemic issues relating to the implementation of the Government’s policy, such as any impacts on the wider delivery timeline.

Embarking on a programme to change administrator

If a scheme has embarked on a programme to transfer data to a new administrator before 9 August 2023, the Secretary of State would expect this to have been done in good faith. The Secretary of State will not therefore grant deferrals where it appears that a trustee or manager has sought to change their administrator or has delayed the change to deliberately avoid needing to meet the connection requirements as set out in the 2022 Regulations.

Retendering the administration of a scheme on a reasonable timetable

If a scheme is required to retender the contract for their administrator, then the timetable for achieving this needs to be reasonable. The Secretary of State will not therefore grant deferrals where it is suspected that a trustee or manager has sought to intentionally delay the timetable to avoid needing to meet their connection requirements as set out in the 2022 Regulations.

What is a disproportionate burden?

Circumstances where the burden might be considered to be disproportionate may be where the monetary cost of compliance with the 2022 Regulations was significantly higher than it otherwise would be if the scheme was not undergoing a change of administrator and the additional cost was not considered to be in the best interests of scheme members.

It would also be expected that evidence should be provided to show that reasonable alternative options for securing compliance had been considered and determined to be unviable. For example, a trustee or manager may wish to consider whether it would be appropriate to use the services of an integrated service provider (often referred to as ISPs) rather than their administrator. If an application is unable to demonstrate that alternative options for securing compliance have been considered, it is unlikely the Secretary of State will grant a deferral.

Putting the personal data of members at risk

It is recognised that transferring large amounts of personal data between administrators is a sensitive task that needs to be completed diligently. However, it remains the responsibility of the person making an application for a deferral to demonstrate why connecting to the dashboard digital architecture within the timeframe specified in the 2022 Regulations would put the personal data of members at risk.

Submission of documentation

It is expected that where trustees and/or managers have embarked on a programme to transfer data held by the scheme to a new administrator and/or they have a contractual obligation to retender the administration of the scheme, there should be evidence available to support this, such as (for example) copies of contractual documents, copies of relevant communications, or minutes of meetings. Other forms of evidence can be provided as appropriate.

The Secretary of State will need to make their decision based on the evidence provided in the application, so it is important that sufficient documentation is provided and each document is labelled in such a way that it is clear what the evidence shows. It is therefore recommended that summaries are provided of pertinent information contained within any documentation submitted, as well as an explanation as to why it is relevant. If documentation is not clearly labelled, this could delay a decision being made, or it may not be possible to take the documentation into account.

The 2022 Regulations require the Secretary of State to consult The Pensions Regulator and the Money and Pensions Service about all applications. This means that information will need to be shared with these organisations as part of the process of considering applications. Any evidence submitted as part of the application will however be considered sensitively and in recognition that some of the information may be commercially sensitive.

3.3 Deadline for making an application

The 2022 Regulations require applications to be made within 12 months of regulation 15(2)(aa) coming into force. Regulation 15(2)(aa) came into force on 9 August 2023, therefore the latest date for making an application would be 8 August 2024.

Applications will not be considered after this deadline.

3.4. How to apply for deferred connection

Applications should be sent to the following email address:

pensionsdashboard@dwp.gov.uk

To make sure that all necessary information needed is received, we recommend using the application form on this guidance webpage.

3.5. Decisions on applications

The Secretary of State for Work and Pensions will aim to provide a decision as soon as practicably possible upon receiving an application. All decisions will be communicated via a written notice to the primary contact listed on the application form. Unless a request is made otherwise, this notice will be sent via email.

The notice will indicate whether the application has been granted or refused.

If an application has been granted, the notice will specify the date of the new deadline by which time connection must be completed.

The new deadline will be determined as the Secretary of State considers appropriate, but this can be no later than 31 October 2027.

If the Secretary of State grants an application but provides a shorter deferral than requested in the application, then the reasons for this will be set out in the notice.

If an application has been refused, the reason(s) for the refusal will be set out in the notice.

The decision will be shared with both The Pensions Regulator and the Money and Pensions Service.

3.6. Review of decisions

There is no formal mechanism in the 2022 Regulations to request for the Secretary of State to review their decision. If you believe that a decision has been assessed incorrectly, you may make further representations via email to pensionsdashboard@dwp.gov.uk. However, unless new evidence is provided it is unlikely the decision will change. The Secretary of State also reserves the right not to consider further representations if they do not include materially significant new information.

3.7. What happens next?

If an application for a deferral is refused, then the scheme should be connected by the connection deadline as set out in the 2022 Regulations.

If an application has been granted, the scheme must be connected no later than the new agreed deadline, as set out in the notice issued by the Secretary of State. The requirements for connection are otherwise unchanged (including in relation to registration with the Money and Pensions Service and record keeping requirements) and trustees or managers should have regard to any guidance on connection issued by DWP, the Money and Pensions Service, or The Pensions Regulator.

3.8. Applications made before 9 August 2023

The Pensions Dashboards (Amendment) Regulations 2023 removed Schedule 2 of the 2022 Regulations which previously set out deadlines for relevant pension schemes to have completed connection and replaced this with a single connection deadline of 31 October 2026. Some minor changes were also made to the deferred connection provisions within the 2022 Regulations. These changes came into force on 9 August 2023. In the case of any applications made to the Secretary of State before 9 August 2023, DWP will contact applicants to clarify the status of their application.

The 2022 Regulations do not prevent further deferral applications being made, provided that an application has not previously been permitted by the Secretary of State. DWP will destroy any documentation relating to withdrawn applications.