Pension dashboards and the art of saying nothing.

Fire 10

Digitalisation?

 

With a great deal of noise, the Government announced yesterday its intention to pilot a set of data standards with 11 pension providers;

Aon

Avivia

B&CE

LV

HSBC

NEST

NOW

Royal London

Standard Life

WTW

Zurich

The list is not inclusive so other providers such as L&G, Aegon, Prudential, Scottish Widows et al will be join in when they choose.

In his speech, Treasury Secretary Simon Kirby told us that these standards would be Open,Flexible and Reliable, would not create a monopoly, would include Fintech start-ups and would nor require a single Government funded platform.

The Government clearly sees this as an easy win. The private sector puts up the money and it takes the credit. It is of course what it should have done at the outset of auto-enrolment but at least it is learning from past mistakes.

But the central question of what people do with the information that will be presented on the dashboard remains unanswered. It is one thing to know how much money you have built up, how much of what you would have had has been taken in charges and what you are likely to have in future – it is another think to know what to do about it.

The phrase “pensions dashboard” is used pretty loosely. the dashboard will (in time) carry a wide range of financial services and will be used to cross sell other insurances as well as the suite of Treasury promoted ISAs.

Regulation

We heard at the meeting from David Geal (FCA) and Andrew Warwick-Thompson (tPR). Five of the eleven providers are occupational schemes (tPR) and six providers are predominately personal pension providers. The inclusion of Aon and Willis Toweres Watson suggests that these consultants are gearing up to be asset gatherers in a big way.

The two Regulators are beginning to work better together but there is still a big difference between the way aggregation is governed. The FCA and its innovation hub promotes itself to those offering regulated advice while tPR relies on guidance with a  lighter touch, Michael Johnson was in no mood to quibble over such niceties and demanded doing away with the distinction; advice is advice whether regulated or not.

It’s clear that the direction of travel is towards empowerment of individuals to do what they like- the Freedom and Choice agenda. However it remains unclear how pensions dashboards will be used, whether they will move the market towards more advice or more guidance – or whether Johnson is right and that the dashboard will make the distinction redundant.

In practice

As well as Government and their Regulators, we heard from a number of service providers, True Potential, My future Now and Yoti. In keeping with Aviva’s digital garage, each presentation focussed on the immediate delivery of financial services in a way that consumers would appreciate- the phone, tablet and PC. I have a high regard for these services, the challenge will be to see whether Fintech will be absorbed into the propositions of the Pension Providers or whether they will be squeezed out.

We didn’t hear from the plumbers – pensionsync, Origo and Altus who will be called on to build the pipes and construct the joints linking systems to each other.

We heard from one provider, B&CE (Peoples Pension) and we got a press release from NOW. The timing of the initiative could not be better for NEST (who see the restrictions on transfers in and out, lifted in April 2017).

So long as this project is set up to deal with the recent past, present and immediate future, the technology on display looks fine. The problems are all in the past but they are not going away any time soon. Nor is there much coming from the third party administrators not engaged with asset aggregation but in the front line when it comes to dealing with member queries.

Verdict

As the title of this blog suggests, this way an announcement more to be remembered for style than substance.

I am concerned that the pilot is far from inclusive and that what works for the 11 providers, may not work for others. However I think the mix of insurers and master trusts is helpful.

I am pleased to see the Regulators working together but continue to be frustrated by the opacity of the guidance/advice debate.

To feel comfortable about what is going on, we need greater openness about what the new data standard are about.

But ultimately, knowing about what we have is no substitute for knowing what to do. The central dilemma for those of us with DC pots is not what they’re worth but what do do with them.

 

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions and tagged , , , . Bookmark the permalink.

8 Responses to Pension dashboards and the art of saying nothing.

  1. James Churcher says:

    I agree with Henry (it was bound to happen one day!). What we have here is not the pension dashboard but just a step in the direction of the pension dashboard. What about all the other providers? With profits contracts with market value adjustments and terminal bonuses? Contracts with capital units or initial units? And then: DC schemes administered in house who don’t have the resources of the big providers? Even to get to all the DC pension in one place, the journey is just beginning. To include state pension and DB benefits… sorry but I think it will never happen.

    Liked by 1 person

  2. Rob mann says:

    I agree with your comments and to add this is an excellent opportunity to bring the companies that are the current guardians of our pensions to work together on a open platform and a common #pensionsdatadictionary that can be used. If
    this were to happens then the GOV could publish APIs allowing small agile, citizen focused groups and companies to design multiple dashboards and tools relevant to specific needs and demographics. A single dashboard designed by institutional big hitters won’t meet the need of all users but a transparent secure (GOV.UK Verify!) platform will be a longer term agile solution.

    Liked by 1 person

  3. Kenneth Thompson says:

    Are the DWP going to put the state pension on the Pension Dashboard? I doubt it because if they do they will find it very difficult to change it in the future as they have done under the new state pension that started on 6 April this year.

    Liked by 1 person

  4. henry tapper says:

    The dashboard will include the state pension – that is the Government’s stated intention. We may have to wait a long time for a fully inclusive pensions dashboard that covers the items James suggests, but where there is momentum, it is possible we may get there eventually.

    Liked by 1 person

    • Rob Mann says:

      If the system is designed well enough to be a pension platform and be pension Scheme agnostic using a common pensions dictionary there is no reason why it shouldn’t evolve in an agile way to allow for a whole spectrum of flavours of pension schemes. Hopefully the GOV digital by default team will be involved in this to ensure its delivery to the standards they are using for the rest of the GOV site.

      Liked by 1 person

  5. If the dashboard is designed as a resource that can be accessed, with the clients OK, for other services that can use the data then it will become even more valuable. That needs designing in from day one for the security and other interfaces.

    I’d like to be able to take the figures from it to pass into our pensions, tax and benefits advice system – who do I talk to?

    Liked by 1 person

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