What the dashboard does.

The pension dashboard is going to tell us is the value of what we have built up as estimated retirement income ((ERI).  This is not a projection but a statement of what you could expect to get from what you’ve built up if you took it today. So much could happen between now and when you take the advice that the dashboard doesn’t tell you what it thinks you’ll retire on.

There is another way of telling you about the future value of your pot and that is to make assumptions on how the pot is going to grow in the future. This is a statutory money purchase illustration (SMPI) and it is worked out based on actuarial assumptions.

Thanks to Richard , I understand that both estimates of future pensions will be available. 

Which would you prefer, SMPI or ERI, a guess about the future or the state of play today?

Mention of Anders Lundstrom

Richard mentions Anders and I must say he looks the kind of chap you could be  Christian name terms on .

Looks a nice Swede

By chance I am having a meeting with him tomorrow morning to have a conversation about Britain and whether Lumera, his firm, are going to step up to the challenge of managing British DC into a more collective mode.

Right now he’s taken on what was ITM’s administrative business and the noise that’s coming out from Lumera’s clients is that the prospects are good.  Managing user’s DAY ONE EXPECTATIONS, is important. Doing DC administration properly is something to do day one. But there is a second day – we’ll see.

Is Lumera a day two provider?

The dashboard will day one give us the reality of what we have already and not a projection into the future. But there are a lot of employers who are not satisfied by day one stuff, they really want to offer pensions to staff and that does not mean annuities. So we will see whether Lumera can tell us whether day two might be what they’re doing in the Netherlands.

My suspicion is that if Britain had done a Sweden and offer a pension dashboard at a very elementary level back five years ago, we might be a little further down the line with projections. I would like to do those projections too – comparisons using value for money as the basis.

I have made it clear what we consider VFM for pensions should be measured on

1. The rate at which people are paid
2. The security of those payments – do they go down , up or stay the same (going down in real terms)
3. Flexibility and features to suit needs

We need an administrator who can support a pension that scores well on all three counts. Investment is the motor but the body of the car is about the ride.

Is dashboard the right name for what we’re getting?

We will be getting a day one view of the money that’s coming back to us , but we are not getting a feel for the ride or the motor.

That is what projections will do and we will need day two data to get a dashboard proper. A dashboard that tells us how fast we’re going, how much petrol is left and whether something may be going with the tyres or the radiator!

Would I call it something else? No! That’s because we should do what they have done in other countries. We need to start simply with the dashboard.

Likewise with the providers of these pensions , the power units and the vehicles that the dashboards will eventually report on, they need to feed data to the dashboard- I hear there’s 40m pension pots and pension data already loaded. That was what we could and should have had loaded at the start of the decade, but we have the capacity to do much with this data – steps two, three and four!

The excitement is in the car not the dashboard but the dashboard , though nothing more than a reporter, is critical. Try driving your motor without a dashboard and you’d be in the kind of mess we are at present.

A simple solution was to retravel the dashboard journey. That way Richard  found the answer to his question.  He remembered Lumera and Stockholm’s purlieu.