I’m enjoying these Pension PlayPen coffee mornings organised by Steve Goddare. Last week’s chat featured Steve Webb and Margaret Snowden and this week’s had me and Ros Altmann. They’ve got a “let’s make it up as we go along” feel to them, quite different from the heavily stage managed webcasts.
Yesterday’s turned into a right little ding dong with as much chat from the 60 people in the room as from the floor. As with last week’s session, the focus was on data and quality. Margaret and Steve had talked about how pension data could be abused (by scammers) and confused (by the DWP) , while Ros predicted that the dashboard would not become a reality for years because of the (current) poor quality of data it would display.
I see data in a different way. We can only test its quality with reference to those whose records are being kept – the savers. Much of the money that is or isn’t in our pots, is there on trust. Who has ever checked that the contracted out rebates paid into their personal pension align with their national insurance record? How can we check that our contributions were invested in a timely fashion when it was our employer who paid them over?
Ros is scarred by her time as Chair of PensionSync, when she discovered that many employers paying auto-enrolment contributions were paying them wrong. Ironically, if they had adopted the software PensionSync were selling, the contribution data would have matched the intentions of both employer and provider. The failure was in not adopting the technology that will power pension dashboards. Put another way, Ros’ objection to putting our pension data online perpetuates the problem PensionSync were trying to solve.
Sunlight is the best disinfectant!
Margaret Snowden pointed out to Ros that people were getting precisely the information she was worried would be on the dashboard in the new simplified pension statements. And increasingly these statements will arrive digitally rather than by surface mail.
The more these statements are scrutinized, the more they will be challenged, especially where people have a means to sense-check their data. Right now , it is very hard to sense check whether your pension statement is right or wrong (see above) , but there are ways to see whether the contributions and the pot value tally. A money weighted analysis of the growth in a fund can be compared with a reasonable benchmark to establish whether it is “ball-park” right and AgeWage has already identified thousands of data records which are incomplete, simply because the pot values don’t tally with the changes in unit prices of the underlying funds.
Putting data onto dashboards shines sunlight on the data, sunlight is the best disinfectant.
Finding pensions must come first
The problems of “goneaways” is huge, the PPI reckon £20bn + of pension saving is lost to its owners. Phoenix reckons that it is out of touch with 12% of its policyholders. The last known address of some policyholders may be several houses back,
The only way many people will be able to find their pension is by a digital search and if poor quality data prevents some pension pots being searched for, the problem of data inaccuracy explodes. Surely it is better to find your pot incomplete ,than to lose all touch with your money?
Never ending lockdowns…
We need to release people’s pension data so they can consolidate pots and pay themselves a wage for life.
We are told we can’t do that because the data is inaccurate. The DB data may be inaccurate because of complexity of calculations (Steve Webb’s reasoning for the problems with the state pension). It may because of abstruse arguments over entitlements (Mcleod and GMP equalisation) or it may be because of poor record keeping.
We have to learn to pragmatically accept that pensions are seldom right and usually wrong. We have very little way of knowing when things are wrong but as long as they are ball-park right, we can accept – pragmatically.
Which is why I am more with Margaret Snowden than Ros Altmann. We need a pension dashboard sooner rather than later.