“The Pensions Schemes Bill makes provision for Pensions Dashboards which will provide everyone with clear simple access to all of their pension information on one portal”.
This quote, from Francis Goss, who is on the dashboard working group, tells me why I am both excited for a dashboard and fearful we will not meet people’s expectations.
It’s the “all of their pension information on one portal” bit that excites and worries me most. I’m excited by the prospect of helping people find out what they’ve got and could have but I’m worried because I know the headwinds that await.
There are two things that worry the people who possess our pensions data, the first is that the data may be wrong and the second is what we will make of it.
Getting data dashboard ready
The issue of unclean data was discussed at length at the PLSA annual conference. It’s not just that data may be wrong, it’s the problem of rectification, the likelihood of most of what is wrong is not in digital format but in microfiche or worse – on paper. Our work at AgeWage suggests that there is very little data on our pensions available in digital format before 1995 – most of it is archived.
We often have no way of verifying data from those days and this combination of poor information, poor accessibility and the impact of time means that almost anything put in the pubic domain could be challenged. If you have been through the experience of GMP reconciliation then think about the challenge of getting data “dashboard ready”.
Issues with engagement
Most people will never engage. Of course those that do may benefit. But what we need are safe, adequate pensions for the vast majority who do not.
— Paul Lewis (@paullewismoney) October 18, 2019
I am entirely with Paul here. The dashboard will help some but not the many – who will need more so much more. I also share Paul’s view that when people engage , they benefit. But I don’t think that second view is shared by many who hold data, for whom the prospect that that data might be used for the purposes of benchmarking, is unpalatable in the extreme.
If people can see their information in one place, they will start asking questions about how they can consolidate not just their data, but their money and that requires them to compare pensions.
I have no doubt that similar fears prevail in the UK where accountability for pension outcomes is at best “ill-defined”. We may be some way from the kind of litigation we are seeing in the US where fiduciaries are regularly sued for under-performance but trustees and IGCs have fought shy of measuring value for money by benchmarking member’s outcomes and for good reason.
The dashboard is likely to beg questions from members as to how their pensions have performed and bland assurances that pension schemes are meeting the fiduciary’s KPIs are unlikely to bear much weight if those KPIs aren’t outcome based.
Why the financial services industry wants to look forward and not back
A wise old owl who runs an underperforming workplace pension told me over breakfast yesterday that his firm did not like looking back. I can understand why.
Of course it’s easy to say that your strategy looks to the future , but customers may have saved with you for decades in the past and it is their experience and not your strategy that may matter most.
Those who debate dashboards are keen to discuss projections as if we will go to the dashboard to work out how to save more, some may do so, but most will use dashboards to work out where their pensions are , what they’re worth and how to get their money back.
The pensions dashboard is essentially a backwards looking tool that explores what has happened. While strong financial services providers will see them gaining assets, most legacy providers will see the dashboard as quite the opposite. Indeed the transparency of getting all of their pension information on one portal fills many data suppliers with dread.
Dashboard transparency will not be universally welcome
Let’s be clear, Francis’ vision is a great one, but it is a vision that fills many DC providers, trustees and IGCs with dread.
The reason it has taken us so long to get this far is because people neither trust their data or what people will do with it.
There is currently very little accountability in DC pensions and that’s because there’s too little transparency. Making data clearly available on a pension dashboard will be publicly welcomed and privately blocked by the people we employ to look after our money.
A better strategy
If this article appears a little negative, let me put forward a strategy which I think will have a better chance of success.
Rather than promise the dashboard provides all information on all pensions. Let’s just promise something that all providers can deliver without risk.
Let’s just promise people the opportunity to find all their pensions so that they can make their own inquiries as they have a right to do – with the help of the Data Protection Act.
Let’s not scare the pensions industry with the threat of unlimited access to our data, let’s be more subtle and more sensitive. That way, we are more likely to get more – sooner!
