Buy and Suppress the pensions dashboard

Asmund paulsen.jpg

Asmund Paulsen

I designed, launched and sold the first – and still only – Norwegian pension dashboard some 15 yrs ago.  “norskpensjon.no” is the pension dashboard service that the Norwegian pension providers, after we gained traction with it, insisted that they should own. It is (therefore) now still – some 10 years later – no more than our initial “minimum viable product”. We avoided “buy & kill”, but got “buy & surpress” …

These are the words of Norwegian pensions champion Asmund Paulsen.

I hope they will not prove prophetic for the UK pension dashboards but I fear that we are already seeing the degeneracy of the Norwegian model.

 


Today I will talk to a group of insurers about the pensions dashboard. It will not be an easy session as I don’t intend to pull any punches.

We are now 6 months on from the latest relaunch of the pensions dashboard and – other than a tame response to a tame consultation – nothing much has happened. This despite the protestations of the chief protagonists, the ABI, the DWP, MAPS and Origo that we would see a dashboard this year. The chances of that are fading as fast as Brexit and what we get is likely to be as unsatisfactory.


Nothing will happen without bravery

If I could characterise the one quality that the pensions dashboard project is missing – it is bravery.

Here I mean the bravery to speak out against the conventional wisdom of “buy and suppress”.

Those outside the tent, and I think back to previous iterations of the project, have been consulted and mollified, but they have been excluded. When they have questioned what is going on within the tent they have been pushed away.

The pensions dashboard is like a royal court , the courtiers bow and scrape to the Pensions Minister while carving up the kingdom between themselves.

There are only two strategies that the established pension providers are pursuing.

The first is to maintain the status quo and see as little disruption to their legacy books as possible. This enables them to maintain their embedded value, on which their share  solvency depends.

The second is to increase new business flows through pensions “project fear”. Project fear in this context means telling people that without radically increasing the contributions they commit to pensions, they will be bereft in retirement. The purpose of pensions project fear is to increase the value of the pension providers to the market, principally (but not exclusively) to shareholders.

It is the solvency of insurers (and now master trusts) that is at stake and it is the boost to future profitability of these same institutions that excites them. The dashboard could be the key to making workplace pensions profitable – a whole lot sooner.

There is no one who is prepared to call this, the court is a powerful persuader to silence.


Hiding behind poor data

We are moving towards transparency in financial services, that is what open banking gives us.

But the pensions dashboard will not be adopting the principles of open banking , laid out by the CMA. Instead it will be run – like the Norwegian dashboard – by those who own the data as a closed shop. We will not be getting open pensions any time soon.

The reason, we are told, that we cannot have open pensions , where dashboards can use the technical architecture of APIs and authentication, each to their own, is practicality.

Those who wish for a centralised system of management argue that having multiple dashboards finding their own data , will increase costs, increase risk and open the doors to scammers.  They also argue that it would expose those organisations who own dirty data , for what they are – poor record keepers,

Transparency being the best disinfectant, I would argue that the best way to clean up a problem is to shed light on it, not to keep it hid.

But this is not the view of the court, who argue that we should wait until the data is clean, before it is mandated that we can see it on a dashboard.


The minimum viable product

This phrase is much used by start-ups to mean the least they can build to prove their concept. We have already had a couple of rounds proving the concept of dashboards and they have taken us three years to complete.

It would seem that we are now to have another minimum viable product, produced within the Money and Pension Service which is called “the pensions dashboard”. The Government expects other dashboards to be built as satellites to their minimum viable product.

But nothing will compete with the minimum viable product which will be controlled by a steering group appointed by Government and a Governance Committee appointed by Government and anyone outside those groups will be outside the tent.

The Government Dashboard alongside the quangos that are growing up as part of the pensions court will so atrophy innovation that the pensions dashboard will join Pensions Wise and very like the Money and Pensions Service, as white elephants.


Meanwhile life goes on

I will be happy to be proved wrong. I would very much like a dashboard to restore confidence in pensions. But I see no sign of it being used to do the things people want to do

  1. Work out the value of their pension pots for the money they’ve saved
  2. Find a way to bring pots together to make them easy to spend
  3. Find ways to ensure their money lasts as long as they do
  4. Establish whether their money is being managed in a responsible way

The ABI and PLSA are so fearful of giving people the information they need that last year they blocked an initiative to show people what – in pounds, shilling and pence – they were paying for their pension pot. The monetary figure was excluded from the single pension statement produced by Ruston Smith and Quietroom and it remains excluded.

Insurers, when given the choice will not disclose to their disadvantage and – when unsure of the consequences – will refuse to take the risk

That is why there is a very real risk that the dashboard will remain on the drawing board for a good time yet and when launched – move little beyond the minimum viable product.


A braver way?

I believe there is a better way to run pensions, a way that allows people to see what they are buying into by looking at what they’ve bought. I don’t think finding pensions is that hard and that modern technology should allow people to ask questions of their various pension providers and get answers in real time.

This “better way” is already emerging in other areas of life- indeed in other areas of financial services.

Pensions would like to think of itself as a special case, but it isn’t. It is part of the retirement eco-system that includes houses, inheritances, business interests and other forms of savings. People are looking to take back control of their retirement finances and are getting lifestyle answers delivered to them through digital technology.

But they are not getting this with pensions.

The pension dashboard continues to be an embarrassment and until someone is brave enough not to be “silent in court” we will go on praising it as a great initiative while suppressing innovation.

Asmund Paulsen is  likely to be proved prophetic, unless we face some uncomfortable truths and start behaving with a little more bravery.

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Buy and Suppress the pensions dashboard

  1. Bob Ward says:

    Wholeheartedly agree Henry, right on the button.

    There has been a recent recruitment for the project but it seems those being put in charge are from within the existing merged agencies. There is no new blood and therefore I can see no new ideas are likely.

    Everyone currently involved are wrapped up in the so called complications of pension, they are NOT complicated. There are simpler ways to provide information to members and any Dashboard could begin right now with the existing information already provided in annual statements and SMPI illustrations. Schemes have to provide these annually so that information could be collated in version one of the Dashboard.

    Schemes must provide CETVs, and even the DB schemes’ limited compulsion of a minimum of one per year would be a start. That minimum get-out clause needs cancelling as well; it should be replaced with a “minimum of one FREE per annum with a small charge allowed for subsequent quotes”.

    There is NO reason any provider or scheme couldn’t currently provide basic member data and a plan value/CETV – they have to do it annually now, for (DC AND DB) from which hosts of Dashboards can collate for members

    Whilst a central Dashboard may be desirable for Gov to show the way, there should not be a restriction to one and neither should there be a restriction to one policy search engine. This smacks of a monopoly which is against the whole idea of transparency.

    The way forward is for commercial Dashboards to provide information and guidance to members FREE but to be allowed to offer other services (collation reports, illustrations, what if scenarios) at commercial rates to regulated advisers and members direct

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