UK Pensions Briefing | Considering wind-up? What the Pensions Dashboards requirements mean for you

The Compliance Burden

Connecting to the Pensions Dashboards infrastructure is a substantial data management and administration task. On top of the connection requirements, the Pensions Regulator expects trustees and administrators to identify and remedy any gaps in their member records to ensure data is complete, high quality and digitally accessible. Once connected, they must be able to provide members with their pension information. This includes administrative, signpost and value data, with value data being the most complex.

Value data encompasses the amount of pension saving built up by the member, their estimated retirement income and contextual information to help the member interpret the data. The values that schemes must supply depend on the status of the member and the benefit type, and contextual information must be provided using the codes set out in Money and Pensions Service (MaPS) data standards.

The Dashboards requirements are onerous. Failure to comply can result in fines of up to £5,000 for individual trustees, or £50,000 for corporate trustees.  We have seen schemes move to wind-up in order to avoid this additional administrative workload. Ultimately, the key questions are: how far you need to get by when, and what do you gain out of it?  

Scope of the Wind-Up Exemption

To be exempt from connecting to the Dashboards infrastructure, a scheme must have fully completed wind-up by the connection deadline of October 31, 2026, and have no relevant members remaining. Schemes merely in the wind-up process at this date must still connect.

The remit of the exemption is stringent. It requires that zero relevant members remain after wind-up. These are defined as active, deferred, or pension credit members. This is despite the general rule that schemes which had under 100 members remaining at the reference date (the end of the scheme year falling between April 1, 2023, and March 31, 2024) are exempt from connection. 

Although schemes still in the wind-up process are not exempt from connection, they will still enjoy administrative benefits. These schemes will not be required to provide value data to members, significantly reducing their administrative burden. Instead, they should only provide value data if the trustee or scheme manager consider it appropriate to do so.¹

Considerations Before Seeking to Rely on the Wind-Up Exemption

Trustees should consider the following points before seeking to rely on the wind-up exemption to avoid connecting to the Dashboards.

• Wind-up Timeline: In theory the October 31, 2026, connection deadline is the latest date by which schemes can complete wind-up to qualify for the exemption, but in practice it should be complete well before then. DWP guidance warns against connecting close to the deadline due to potential administrative delays. To mitigate this risk, trustees should set an internal “go/no-go” decision date to determine whether wind-up can be completed in time, or if connection must start promptly.
• Dashboards Preparation Checklist: The Pensions Regulator has issued a list of preparatory tasks for trustees to undertake ahead of connection. These include assessing and improving data quality, planning member communications, ensuring data protection compliance and updating service contracts. Trustees may wish to consider these tasks early as a precaution, in case wind-up will not be completed on time.
• Forgotten Members: Unforeseen errors in the wind-up process could still bring the scheme back into scope for connection if previously forgotten members emerge. Should this occur after October 31, 2026, a new connection deadline would apply to the scheme. 

Conclusion

Schemes that have already completed their wind-up can view the exemption from connection as an added bonus. For schemes currently in the wind-up process, even if this will not be complete by the connection deadline, the exemption from providing value data can be seen as a useful extra. However, scheme wind-up is a complex and time-consuming process. The decision to terminate a scheme should be driven by broader strategic considerations, not simply by the desire to avoid Dashboards obligations.