There’s been some very positive news coming out of the Pension Dashboard Program lately
The Pensions Dashboards Programme will work with:
on developing standards, refining the onboarding process for dashboard providers and testing the ecosystem.
— Pensions Dashboards Programme (@PensionsDboards) December 16, 2021
The news suggests that at last we are seeing some tangible progress towards delivery of a dashboard we can use in 2023 and a network of dashboards in the following years that can make finding pensions and pension pots easy and give us a chance to see our retirement funds on one screen.
This is what the general public were promised by MaPS in 2019 and whenever I mention it to people who don’t work in pensions, it immediately becomes a topic of conversation. People want a pensions dashboard they can log into very much indeed.
It’s almost as if a pension dashboard might be fun to use!
But while the general public waits, the pension industry agonises about what the general public wants, needs and can handle.
Or Project Fear…
— PLSA (@ThePLSA) December 16, 2021
There is a fear that the general public will be scammed out of their savings, if they are told about their savings. There is concern that we won’t be able to handle the digital architecture that shows our pension and pension pots on a single screen. There is a worry that our data will be shared with people who shouldn’t see it . There is a perceived danger that schemes will be sued for what they show and what they don’t show. There’s uncertainty about how online is online and what data needs to be real time and finally schemes are scared that they won’t be ready on time.
The PLSA – which is an association for those providing pensions and liftetime savings to the general public, considers that it needs clarity on these issues so that its members can get on with complying with what the Government requires of them. There is a further worry that the PLSA isn’t clear which of the Government’s regulators is going to hit them over the head for not getting all this right.
The PLSA should be providing answers to these questions for its membership. But I’m keen to help them think through their issues. My comments are in italics
Here are the PLSA’s 7 “big issues” – (the PLSA has 26 issues in total)
Testing, and managing, savers’ understanding
Extensive testing is needed with a wide variety of different savers, who have differing levels of financial awareness, that they understand the information they are seeing on dashboards, and are not overwhelmed by it. The testing should also analyse what users do after seeing their information. These detailed testing results are key in defining the display standards which all dashboards must always use.
Those with pensions and lifetime savings are inundated with statements, wake up packs , invitations to visit Pension Wise and various investment pathways. Little of all this gets digested and the general public seem decidely underwhelmed by what they get. The dashboard offers those with pensions and pension savings the chance to make sense of what they have, we must focus on making information useful and encourage people to turn pots into pensions. Dashboards could and should be fun.
ISP technical connections with the digital architecture & dashboards
Schemes will be largely dependent on their incumbent administration and technology providers, or newly procured ones, to deliver their dashboards compliance. So all administrators and technology providers need to be able see, and understand, published details of how they must connect with the central digital architecture, and with dashboards, including all necessary technical and security specifications and standards.
The interface between schemes and dashboards has been under development for a number of years. Pension schemes under the PLSA umbrella are going to benefit from this work and compliance with the protocols needed to make data available in real time will become a commoditised hygiend factor for pension administrators. Access to real time information is a feature of HMRC’s dealings with payroll adminitrators. There should be very little for schemes to worry about here. Dashboards could and should be fun.
Scheme’s continued GDPR compliance
Schemes need to be confident that, in complying with the dashboards compulsion requirements, they can continue to comply with all existing GDPR requirements. A clear statement of guidance on this by the Information Commissioner’s Office would be very helpful.
The GDPR has been in place for several years and complying with it isn’t difficult. Schemes should be able to deal with GDPR issues by now without the help of the ICO. Dashboards could and should be fun.
Clarity on the liability regime
There are two separate liability aspects on which schemes need clarity: not found pensions, and pension amounts returned. If a scheme does not find a pension which they should (e.g. because personal data does not match perfectly), it will not appear on the user’s chosen dashboard. Separately, the pension amounts appearing on dashboards almost certainly won’t be how much is actually payable. Schemes need to have certainty where legal financial responsibility will rest should users take action, or fail to take action, in light of i) their pensions not being shown and / or ii) the pension amounts they see.
The worries that the PLSA are highlighting relate to the quality of scheme data and not to the dashboard service. It’s possible that other people’s information could appear on a dashboard but it is much more likely that people will miss out on pensions and pots because of too much caution in matching. The genuine concern that schemes wil have is that they have innacurate records. The PPI reckoned in 2018 that £20bn has “gone missing and that money is a general liability to pension providers. The pension dashboard will expose bad practice and may well require expensive remedial work. Schemes cannot expect to be given legal indemnity because they comply with dashboard protocols. Looking at things positively, the pensions dashboard looks to be an opportunity for schemes to put their houses in better order , both in terms of member data and in the calculation of benefits. Dashboards could and should be fun.
Definition of View data to be returned
Schemes needs certainty on the pension amount data to be returned after a pension is found, both accrued (and, if required, projected), across all scheme types (DB, DC, etc.). As well as the detailed definition of these amounts, schemes need to know how quickly their ISPs are required to return the required data when a user requests it, as well as how recent the figures their ISPs return must be. Response times and recency could significantly impact how schemes and ISPs choose to implement their solutions.
Pension dashboards promise us an online experience. My understanding of online is that we get the most up to date data available. The issue for schemes is how relevent the data they hold on their members is expected to be. We generally expect the value of our benefits to be accurate and information to be real time. Talk of “response times” is worrying, suggesting that pension schemes still think they can deal with online requessts with manual interventions. The internet does not work like that. Any projections need to be calculated using standard assumptions which are universally applied, this is the only way that they can be delivered in real time and without ruinous expense. Dashboards could and should be fun.
Clarity on the timeline
Schemes need to know the window within which they must comply and the process for their onboarding to the dashboards ecosystem. Separately, schemes need to understand when Government intends to make pensions dashboards public (the Dashboards Availability Point or “DAP”) so they can plan their additional resources.
It would be much simpler for pension schemes to be proactive than reactive. If a pension scheme is not confident that it can put its data online right now (with all the notice they have been given) then it should be paying immediate attention to the problem. Once again , the PLSA need to turn issues into challenges and start looking at the pension dashboard as an opportunity not threat. Dashboards could and should be fun.
Regulation of data provision
Schemes need to understand what principles will be adopted by the two respective regulators (TPR and FCA) for the dashboards compliance regimes.
What is important is that the principles are the same and that all providers of data , whether commercial or not, make every effort to help prospective and actual pensioners and lifetime savers, understand what they have got. It is clearly not the job of the dashboard to tell people what to do but it should put them in a position to make decisions on how to organise their finances or to get support if they get stuck. Dashboards could and should be fun.
The PLSA has some good news
The first wave of schemes stands ready to connect to the pensions dashboards ecosystem but, in order for them to do so successfully, they need clarity and certainty on all the above critical areas.
The PLSA says that “there is much to be resolved in a short time“. But we are unlikely to see any live data on a dashboard until 2023. Just how long do pension schemes need and just how much help do they need?
We need a positive campaign from the PLSA, promoting the dashboard to its membership. The PLSA should be showing the way and making the public aware that their pension schemes are getting “dashboard ready”.
The dashboards should be “project fun” and not “project fear”. Dashboards could and should be fun.