This was the question on the lips of several members of the public gallery as they left the Work and Pensions Select Committee evidence session which you can watch here . If you have an FT subscription you can read Jo Cumbo’s report of the event here.
In truth it had, until Frank Field brought Hillsborough into the discussion been a rather dry debate, focussing on the iniquities of asset managers in not giving up data to the LGPS and other such obscurities.
The Chair, Frank Field, who at one point seemed to have fallen asleep, roused the gloom-laden event by extolling the then Home Secretary (Theresa May), for requesting that the Yorkshire Police revealed all the data that they had. This simple request, contrasted with previous requests (specific) and had proved successful.
Field’s point, as I understood it, was that a principals led call on Financial Services Companies to reveal everything, would be more effective than a call for specific data.
This is an important point and one that – post GDPR – is of considerable relevance in the dashboard debate. We are led to believe – a data request to someone with your pension information (a fund administrator, third party record keeper or a bundled administrator) triggers a response that must fully disclose all relevant information. It should follow that a request for data (for instance on how much a fund or administrative service costs) must be disclosed.
As I’ve made clear on this blog, I am not for mandatory data provision and I don’t think that Theresa May’s stipulation carried with it the force of law. The data that it made available resulted from someone who carried authority (a Home Secretary) demanding that the right thing be done and be done for the public good.
I believe that Government can do the same with regards to the data that people need to make good financial decisions on pensions, whether those people be the fiduciaries of the Local Government Pensions Scheme or ordinary folk like you and I , trying to make sense of our pension affairs.
Revealing bad news
There is a second aspect to the revelation of data in the process as part of a process we now call “transparency”. It is this.
Necessarily, putting data in the public domain makes it open to scrutiny and will reveal that some of that data is wrong. In the case of Hillsborough, some of the information made available to the public, implicated certain people in deliberate cover-ups, sometimes downright lies.
It is inevitable, in the provision of data through a dashboard , that some of the data will reveal unpleasant truths. Whether through ignorance, weakness or deliberate fault, some data that pension providers hold – was wrongly recorded and remains wrong to this date.
What Theresa May did, in requiring all Hillsborough information to be made available, was what the GDPR did in May this year, it turned the onus of data provision on the data controller who has a principal based requirement to tell people what they hold in terms of data, whether the data be right or wrong.
If it can be proved that the data held is deliberately wrong, then the data is fraudulent, if the data arose through sloppiness or “weakness” then there is a case for civil action and if the data is recorded wrongly through ignorance (which I take may be no fault of the data recorder), then there may be no case to answer. But whatever the reason for mistakes,.people have the right to scrutinise the data that is held about their financial affairs and the pension dashboard will be part of the process that gets them there.
Can individuals make sense of so much data?
Thinking about Field’s analogy, I realised that the forensic work that went into uncovering what happened at Hillsborough is analogous to the kind or work that would be needed to work out if someone had received value from a pension provider, for the money handed to them,
Ignorance, weakness and deliberate fault , may all have been at work but in the vast majority of occasions, best endeavours will have been employed by the providers to deliver the service promised. Most football matches do not end in disaster. Despite the gloom of the meeting yesterday, most people get a reasonable result from their pension saving,
But to date, there has been no way of knowing whether people have got value for money, there has been no historic assessment either of the policies and schemes entered into, nor of the treatment of money in/ money out and what happened to the investments!
That is about to change, or at least it will change if I can fulfil the business plans for AgeWage.
What I am wanting to do.
I’m tucking this away at the end of the blog about the “Hillsborough analogy”, but you will read this again and again in weeks to come.
I believe that people are entitled to know not just what their pension pots are worth, but whether they got value for the money they paid.
In one sense I will define “money” as the amount paid into the pension pot and in another I will define it as the money taken out of the pot in charges. It is possible to compare achieved outcomes to expected outcomes by using model price tracks and model charging structures, it is possible to assess VFM at a contract level through a comparison of achieved performance and actual charges.
As well as giving people a proper assessment of what their investments have done historically, I want to give people a fair choice of options going forward. I want people to be aware of all choices available to them in the new world of “freedom of choice”. But I also want people to take their own choices, without having to sacrifice a huge amount of their savings in advisory fees. I want the choice itself to contain the word “free”, since most people will not want to pay as much to spend their money than they already have in building it up.
This is the fundamental aim of AgeWage – to allow people to keep their savings and have them paid back to them in the way that suits them. Whether this be a pure AgeWage or as a cash-sum is an individual’s choice. It is not mine to influence other than to put information forward in a way that makes choices and their impact clear.
Was Frank Field right to mention Hillsborough?
Coming as he does from Birkenhead, Field will know how provocative any mention of what happened to Liverpool fans will be.
I was there when he made the analogy and I know he was not being flippant or provocative, he was trying to illustrate a crucial question that we all have to ask if we are to properly understand “transparency”. The truth about Hillsborough remained hidden for fifteen years, it took Big Government to get the truth in the open. The truth was demanded by a Home Secretary -not by a court of law – it was revealed out of respect for the authority of Government.
I take Field’s analogy to be about the mandating of data into a dashboard (or directly to LGPS and other institutional investors). If we pass laws that require providers to produce the information, we do no more than the GDPR has already done. There is quite enough “law” out there. If instead we rely on the intentions of Government to make information about people’s pensions available to them, then the onus passes from enforcers to delivery.
The DWP has realised this. Just as Auto-Enrolment would not have worked if we had prescribed NEST as the sole provider, so the Dashboard would not have worked if the DWP had created and managed the central data process.
The DWP looks no more likely to mandate data provision than to run the database. But it looks very likely to rely on Government’s authority, to ensure data is provided in the way people need it to make proper decisions on how to invest and ultimately spend their pension savings. In this they do of course need to know the value of the income streams coming their way from defined benefits (especially the state pension).
Frank Field was absolutely right to use the Hillsborough analogy as it brings to life both the importance of Government (Theresa May’s intervention) and the role of those holding the information (the South Yorkshire police). Substitute Esther McVey and the financial services industry and the analogy is there.
The catastrophe of Hillsborough was violent and specific. Every football fan who has ever stood on the terraces feels the awful impact of Hillsborough. The impact ignorance, weakness and deliberate fault on our retirement finances is not violent and general. But it too can be catastrophic.
We need – both from Government and from pension providers, the kind of pact that followed May’s intervention. We need to have the information in the public that doesn’t just tell us what happened, but allows us to make plans for the future. That is the final analogy with the Hillsborough inquiry.