Driving support for the pensions dashboard

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Driving support for the pensions dashboard

I think it’s fair to say that few people would have predicted a government U-turn on developing the pensions dashboard, as was suggested in a July article in The Times

The Department for Work and Pensions (DWP), which took over responsibility for the dashboard from the Treasury in October 2017, is currently conducting a feasibility study, and in media reports dismissed the article in The Times as “speculation”, stating that a decision would be made once the ongoing study is completed. 

I am a passionate believer in the pensions dashboard, as are many other people in this industry, and there is great support for it across the board.

Allowing pension holders in the UK to see the value of their pension savings all in one place, rather than have to contact each individual pension provider for a valuation (if they can be bothered to do so), has the potential to change people’s financial lives, helping them manage their savings more effectively and to plan for their retirement.

It can be a catalyst to get people more engaged with their future planning and, more importantly, to take action.

The enemy here is the current lack of engagement because of the complexity of the UK’s pension system, and the resultant difficulties people have in finding out this information and realising their true financial situation. 

Key Points

  • The potential cancellation of the pensions dashboard took everyone by surprise.
  • The technology is ready to go.
  • Compulsion of the industry may not be necessary.

In this respect, a major benefit of the dashboard, as envisaged, would be its ability to help people locate pensions they had lost track of over the years.

This has application not just for legacy pots, but potentially for the nine million workers now with pensions in employers’ auto-enrolment schemes who are likely to change employers (up to 11 times) over their careers. 

The technology is in place

Briefly, the pensions dashboard requires: 

  • A consumer interface, the dashboard itself; 
  • A means of identity verification to ensure the person requesting the information is entitled to do so; 
  • An engine to take the data request, securely relay it to the pension providers and deliver the data back to the consumer’s dashboard; 
  • A body to oversee the governance – the legal structure required to make it work.

Origo has been fully supportive of the dashboard and deeply involved in helping to develop the ‘engine’ technology and progress the initiative since it was announced by former chancellor George Osborne in 2016. He set a deadline for the service to go live in 2019. 

We have been working with a number of progressive pension providers who could see the benefits to consumers of a dashboard, as well as key leading-edge software partners.

Origo was one of the organisations that helped develop the prototype dashboard, which was demonstrated in April 2017.

Since then we have continued to develop the technology, testing it to handle requests from in excess of 15 million active users.  

I mention this because from the technology perspective, the pensions dashboard is proven, ready and could be very quickly implemented.

Furthermore, our recent work in scaling the solution to cope with 15 million projected users gives us additional confidence that, despite the complex nature of the UK pensions landscape, the dashboard could be provided at a lesser cost on a per-citizen basis than in other European countries with dashboards.

In addition, using application programming interfaces and the user-managed access open security standard, the UK has the opportunity to implement an advanced dashboard architecture that will enable consumers to access securely all of their pensions data, and at the same time control who they can share this data with. 

This approach will also allow for dashboards to be provided to consumers securely through trusted brands including banks, platforms and other financial institutions (if that is the approach the DWP sets out in its feasibility study). 

One of the key issues highlighted in discussions around the pensions dashboard is its value to consumers and the industry if the whole of the pensions market is not on the dashboard from day one.

It would have obvious benefits for financial advisers as the dashboard could allow for delegated authority, where a client gives their adviser permission to access their dashboard, thereby saving adviser firms the often considerable time and resource in obtaining multiple pension valuations. 

So, if the technology is in place and can be delivered cost effectively, what else needs to be addressed?

Security and governance

The security aspect of the pensions dashboard, of course, is crucial. So a system needs to be in place to assert the identity of consumers (and delegates if allowed) to an appropriate level of assurance.

The private sector equivalent of the government’s Verify system is an option here and there are alternatives that could undertake the role.

Security of data while in transfer is also vitally important and has been baked in as part of the IT project. 

Also required would be governance and rules for consumer consent and control of access to (and sharing of) their data with dashboards and delegates, as well as a standards body to oversee continued maintenance of these integral elements.

Mandatory participation

One of the key issues highlighted in discussions around the pensions dashboard is its value to consumers and the industry if the whole of the pensions market is not on the dashboard from day one.

Compulsion of market participants has been raised and its merits debated.

Our view is that onboarding of providers/administrators (by market share) will help to rapidly increase industry coverage and encourage use among consumers.

Hence, peer pressure and market advantage would be significant incentives to help drive the dashboard development. There is already a coalition of the willing actively planning and preparing resources and systems for the advent of the pensions dashboard.

Compulsion might not be necessary therefore from the start. 

So, in brief terms, this is where Origo sees the current position of the dashboard.

As an IT project, the dashboard is in an advanced state of readiness – most of the work has been carried out and would continue to be undertaken by the industry, alongside funding of the initiative once operable. 

The pensions dashboard is an initiative of great ambition and significant social benefits for pension holders across the UK.

This is why, quite rightly, it has garnered a high level of support within the industry.

Bearing in mind that significant support, we believe it could be delivered relatively quickly and successfully – and if given a timely green light, it could still be ready within the 2019 deadline. 

Anthony Rafferty is managing director of Origo