Pension Dashboard  

Dashboards to allow pension consolidation

Dashboards to allow pension consolidation

The pension dashboard project will allow savers to consolidate their pension pots, the Exchequer Secretary to the Treasury has said.

Speaking at the Pensions and Lifetime Savings Association (PLSA) trustee conference today (December 6), Robert Jenrick said the project would enable savers to view their pensions and to make choices, "such whether to amalgamate them in time".

The plan for the pension dashboards, with the first one due to launch in 2019, is to allow savers to see all of their retirement pots in one place at the same time, giving them greater awareness of their assets and how to plan for their retirement.

However, the Department for Work & Pensions' (DWP) consultation on the project, published on Monday (December 3), had stated pension consolidation won’t be available in the initial phase.

The paper stated: "The feasibility work also suggested that including detailed information such as scheme charges, or functionality that enables robo-advice, transfers or the consolidation of pension pots, may be inappropriate for a dashboards’ initial implementation phase."

Mr Jenrick also said the pension dashboards would increase transparency and could be an important tool in developing the patient capital initiative.

If adopted on a significant scale, it would provide additional funding for faster-growing start-up companies while also potentially increasing returns for savers.

He said: "The next generation of pension savers will have the chance to invest in artificial intelligence, in world changing technologies, or in social impact investments.

"The savers and investors of today, and those who will follow them, will demand that their savings include such investments and will be surprised to discover if they do not."

Mr Jenrick said his goal was to have data sent to "every pension saver's smartphone, informing savers on how their pension is performing and in what it is invested".

He added: "Inevitably, that technology will force the question on the industry: how are we investing and would our investment inspire our savers, as they become active consumers in the future."

Mr Jenrick launched a new guide from the PLSA on this topic –  The Long-term view: patient capital and illiquid investment.

The document pulls together case studies from the industry body members – both pension schemes and asset managers – who have already been investing in a long-term and patient capital way in illiquid assets.

The case studies cover the full spectrum of patient capital approaches including infrastructure, impact investment, private equity and debt. It is hoped that the guide will support and encourage schemes to think about incorporating illiquid investments into their portfolios, the PLSA said.

Mr Jenrick noted that defined contribution schemes in particular "invest very little, if at all, in patient capital".

However, this was mainly due to regulatory restrictions, he added.

FTAdviser reported in October that the government was taking steps to allow DC schemes to facilitate these investments.

The Financial Conduct Authority (FCA) will publish two consultation papers on this subject by the end of 2018: the first one is to explore how effectively the UK’s existing fund regime enables investment in patient capital, and the second will be on updating the permitted links framework to allow unit-linked pension funds to invest in an appropriate range of patient capital assets.