The idea of having more than one pension dashboard – indeed dashboards for commercial purposes, has been mooted since the outset of the project but has never seemed further away. We have three questions we should ask about them
- Will private dashboards improve the pensions or freedom from pensions that we get?
- Will focussing on them rather than other priorities detract from overall worth?
- Is there any evidence from other countries that commercial dashboards done good for citizens?
I don’t think that a clear answer can be given to any of the three.
- Do we need more than a public dashboard? We are yet to see the impact of the public pension dashboard that will be delivered some time after October this year. The pension dashboard has to give this dashboard 6 months from being unleased till being delivered so April is the first break point, otherwise the dashboard will drift back day for day delayed. So supposing that we need more is pre-emptive, we just don’t know whether a public dashboard will do the trick. What is the trick? I suspect we won’t know that people are satisfied with the pension dashboard for a while to come.
- Will focussing on commercial dashboards have be to the detriment elsewhere? Pension dashboards rather than a dashboard seem to benefit predatory providers who are looking to consolidate individual pots into the DC equivalent of a super-pot! I think this has limited value to the public, a consolidated pot may be good or bad and we hope that the VFM estimation will give us some help in this. But it does not help us with the big questions about pensions. The big questions being posed are in the Pension Schemes Bill and centre on decumulation rather than accumulation or consolidation of pensions. I think it is too early to see the impact of the first dashboard and the deadlines on providers to offer default decumulation to their policyholders and members.
- Is there any evidence of commercial pension dashboards in other countries? We are at the back of the queue when it comes to pension dashboards; our Scandinavian networks are way ahead of us. I see no evidence that dashboards of the style being promoted by private companies have not worked in other companies who have got on quite well with a state system.
With People’s Pension the opposite of a dashboard approach is proposed
There is an alternative to a dashboard aggregating pots into a DC superfund. The five changes the People’s Pension is calling for include:
- Clear, comparable pension information: A requirement for pensions providers to display simple, comparable, and easy-to-find information on investment performance, charges and customer service.
- A ban on pension transfer incentives.
- A more consumer-focused Value-for-Money framework
- Delaying to commercial pension dashboards until VFM metrics displayed across all pensions
- Mandatory scheme comparisons during transfers, including an obligation on the receiving pension scheme to flag important differences between pension schemes.
My view is that so long as we aren’t careful about transfers, we will open the door to the lowest common denominator – brand. I would like people to think about pensions as a regular income increasing with inflation till you have no need of it. Pensions are not like pots and are not transferrable. So long as we persist with an obsession with pots and super pots
More important things to think of.
I am sorry that the Pension Dashboards Program has given in and published proposals as to how to carry on to commercial dashboards.
This I suspect will be taken up by the commercial pot providers who are looking for alternatives to the important developments in the Pension Schemes Bill and subsequent CDC and VFM legislation and regulation.
But we need to prioritise the legislation that is going through parliament right now. This means turning down the heat on commercial pension dashboards.
