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A key deadline is looming under the 2022 Dashboards Regulations, and it is not your pension scheme’s “connect by” date, nor is it the ultimate statutory connection deadline of 31 October 2026.

Pension schemes have until 8 August 2024 to apply to extend their deadline for connecting to the pensions dashboards infrastructure beyond the statutory deadline of 31 October 2026, if certain criteria is met.

 This might be relevant if your scheme is moving towards buyout and you are concerned about your scheme’s ability to meet its own dashboards “connect by” date and the ultimate 31 October 2026 deadline.  

Should You Consider Applying for an Extension if Your Scheme Is Approaching Buyout?

Whether action is necessary or helpful will, of course, depend upon the likely timing and specific circumstances of your buyout project.

If your anticipated buyout date is before your “connect by” date, or it is between your scheme’s “connect by” date and 31 October 2026, you can rely upon regulation 3(3) of the 2022 Dashboards Regulations (on the grounds that the number of relevant members will have fallen to zero before 31 October 2026). No action will be necessary, unless there is a risk of the buyout being delayed. In the latter case, you should inform the Pensions Dashboard Programme and The Pensions Regulator that the scheme will not be connecting on its “connect by” date.     

If the buyout date is likely to be after 31 October 2026, an extension of up to 12 months can be made to the Secretary of State if the overall project (including any buy-in element) commenced before 9 August 2023 and you are able to establish that it would be disproportionately burdensome to meet the 31 October 2026 connection date or that it would put member personal data at risk.

While some schemes approaching buyout will not meet the 9 August 2023 criteria, those schemes that undertook a buy-in as a preliminary step towards buyout may have started the process pre-9 August 2023 and may wish to consider whether meeting the dashboards timetable, as well as juggling a buyout project, would be unduly burdensome. Our guide gives a flavour of the project planning that will be needed to get dashboards ready.

There is also the possibility that combining getting dashboards ready, with passing large amounts of personal data between the scheme and insurer(s), could lead to an increased risk of a data breach.

The obvious benefit of being granted an extension in these circumstances is that if the buyout does complete before any extension expires, the obligation to connect will fall away under the 2022 Dashboards Regulations because the scheme will have zero relevant members as at the new connection date.

What Else Do You Need to Consider?

Trustees should be realistic around the ability to meet their buyout timetable, especially if the scheme holds any illiquid assets. A realistic timetable will help to inform whether or not an application for an extension would be appropriate.

The DWP’s guidance on deferred connection, along with the connection guidance, will also assist trustees in assessing whether the circumstances of their scheme would make an application for an extension appropriate. 

For further resources on getting dashboards ready, please see our pensions thought leadership library. In the meantime, remember the application deadline for an extension is 8 August 2024, so urgent action and professional advice is recommended if this does apply to your scheme