Pension dashboard stitch-up exposed!

pp dashboard.jpg

I find myself the horns of a dilemma. I violently disagree with the ABI, Origo and at least two of the big master trusts. In particular I disagree with People’s Pension, who normally I agree with and Gregg McClymont- one of my favourite people. I do not think them dishonest, but – in the pursuit of their aims- I find them saying things for what they believe the greater good – that amounts to a “stich-up”.


My beef

Like everyone, I reckon the pensions dashboard , a “once in a generation” opportunity to put people back in control and restore confidence in pensions. The dashboard could help people to find their pensions, understand their likely position in retirement and do something about making the most of what they have (including their savings rate).

However this is achieved is secondary to it being achieved, so the comments below are based on a fundamental agreement with all parties that the fundamental aims of  dashboards are good.

But I have a beef and this is it.

The major pension providers and the organisation they set up as a pensions data clearing house (Origo), want to orchestrate the finding of pensions meaning that they control the means of dashboard production. They have convinced the DWP to write a consultation where there is only one pension finder service and only one data validation service. There can be no doubt that in a procurement process, the provider of that service would be Origo, with the help of a couple of subsidiary companies.

I believe that this is a stitch up and it will lead to no good. Here are my five reasons why

  1. The DWP are in no position to determine the technical architecture of the dashboard. They do not have the skill set to call the market, the procurement process will delay implementation and what will be delivered will be subject to the same problems that have led to failed roll-out of Universal Credit. Putting the DWP in charge is a mistake. The DWP should not prescribe the technical architecture of the dashboard.
  2. There is proof of concept for a system of open sourced pension finding (rather than the single pension finder service proposed). It is called open banking and it has worked. We now have faster payments, integrated data and an altogether better banking system than we had before the implementation of the CMA 9. This is despite the protests of the big banks who adopted precisely the protectionist position the large insurers and master trusts are adopting today.
  3. There is, outside the hegemony of the biggest players a nascent “pentech” sector , it includes soon to be household names such as Smart Pensions, Pension Bee and infrastructure players such as Altus, F&TRC and Pensionsync. Data aggregators such as MoneyHub, MoneyBox and AgeWage are keen to provide better information on pensions to the 94% of us who do not pay for advice. The single pension finder service will make them reliant on a centralised , old school, approach that will prevent them innovating.
  4. The arguments for the single pension finder service and the oligopoly it would be created are based on a pensions “project fear”.  They are protectionist and self-serving. We are told that it would lead to less data security, more expense to the providers and a lack of consistency with which the data was presented. These arguments fly in the face of the actual experience we have had of open banking, they are the same arguments as the retail banks put up to prevent open banking, they were rejected by the CMA and they should be rejected by the DWP. The counter-arguments are stronger as they are evidence based (see below).
  5. The original conception of the Pensions Dashboard , back in 2016 (Treasury led) was for open pensions where the dashboard would foster innovation and best practice. It has taken three years to get nowhere listening to counter arguments from those with an interest in the status quo. The status quo is rubbish, people can’t see what they’ve bought, can’t plan for the future and the DWP’s proposed timeframes for delivery of the dashboard are so long that it is unlikely people will genuinely benefit from these dashboards for five years.

To summarise

  1. The DWP are out of their depth and should leave this to the market
  2. Open Banking shows pensions a better way
  3. There is capacity to build open pensions
  4. The arguments against open pensions are protectionist
  5. The proposed roll out of the dashboard will be too slow, we need action now.

Why I have to say this again.

All of this has been said in previous blogs and in articles in newspapers – by me, by Pension Bee and by many others. But our voice is a small one and it is drowned out by the lobbying of the ABI and friends.

Before the launch of the consultation, the Work and Pensions Select Committee were assembled to hear the voice of this lobby. Frankly that was bad Government, no ear was given to the Pentech position.

Now, with the launch of the consultation’s findings imminent, we find that senior MPs, including the Pensions Minister are being entertained by Prospect Magazine in a meeting arranged by People’s Pension.

What is more, the write up of this meeting is being publicised on social media as a genuine debate.

But reading the Prospect Article that came out of these differences I find that someone’s moved the cheese.

The differences were akin to arguing how many colours you paint the car and ignore the arguments for a choice of different engines and chassis. Whether allow people to see the data through multiple dashboards or just one is irrelevant – how people access the data is up to them. Open Pensions is not about seeing numbers on your phone.

Open Pensions is about creating a data sourcing infrastructure as consumer friendly as exists in open banking and a state sponsored app just doesn’t add up.


Where were the Pentechs?

The Pentechs were not invited to the event, the consumer groups who were have a quite different agenda and the debate allowed the ABI to pretend to Guy Opperman, Nicky Morgan and Ian Murray that there was consensus on the fundamental dashboard architecture.

Every one of the project fear arguments can and should be tested. All will be found wanting in the light of actual experience of Fintech in the financial sector.

The single pension finder service will lead to greater risk of outage of supply, greater risk of cost hikes (a sole supplier) and it will lead to the stifling of innovation. The DWP should wake up to this as the Pentech firms aren’t going away and we will not sit in a dark corner.

The chance to be good at pensions (again) on a world stage, is being missed.

And the blueprint on how open standards could improve the dashboard has been presented to Government and the pension industry.


This debate should not be held behind closed doors

These arguments were excluded from the debate, the pseudo-debate that happened was a convenient smokescreen.

There is a space for a genuine pensions debate and that’s what should happen as a result of the consultation. The lobbying of ministers and senior MPs prior to the publication of the consultation, and the presentation of the debate in the way that it has been engineered is a perversion of parliamentary process and needs to be called as such.

 

pp dashboard

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 age wage, Dashboard, pensions and tagged , , , , , . Bookmark the permalink.

2 Responses to Pension dashboard stitch-up exposed!

  1. Dr Robin Rowles says:

    Henry, I worry about pensions in general, but also any system that is designed and built by the “pensions industry”. We have already seen the disaster that is the calculation of assets and liabilities that closed DB schemes (and who gained?). We are seeing the disaster that is pension freedoms. How do we stop this? Governments used to be concerned about the wellbeing of the people in their country. Sadly I see none of that these days!

    • DC says:

      Dr Rowles, you should be aware that the pensions industry has plenty of skeletons in the closet, however the DB liability calculation was primarily (though not exclusively) driven by changes in accountancy practices.

      Also pension freedoms came largely as a surprise to most of the industry as it was dreamed up the civil service.

      Henry, to your points, every one makes sense and I hope the current proposal doesn’t go ahead as they have planned.

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