Pension Dashboard  

Warning of greater inequality under pension dashboard

Warning of greater inequality under pension dashboard

The Pensions Administration Standards Association (PASA) has warned the pension dashboard project could increase the inequality between members of defined contribution (DC) and defined benefit (DB) schemes.

In its response to the Department for Work and Pensions' (DWP) dashboard feasibility study consultation, which closed on Monday (January 28), the pensions body warned DC members could face charges from the dashboard that their DB equivalents would not face.

This was because while providers of these type of schemes were able to pass on the cost of the project to their members if they fund the project, the same wouldn’t be possible in DB arrangements.

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The government revealed its plans for the dashboard in December saying it would allow multiple dashboards to enter the space but the approach to funding the dashboards has yet to be decided.

PASA stated: "This is inequitable and we believe this will further drive a wedge between members of DC and DB arrangements. This challenge should not be left to chance."

Meanwhile the Association of Consulting Actuaries (ACA), whose members provide advice to thousands of UK pension schemes, voiced concern about the cost that could be imposed on DB pension funds.

In its response to the consultation, the representative body stated DB schemes could be particularly affected if they were not set up to communicate individual benefit information to members electronically ‘at the touch of a button’.

The ACA stated many of these final salary plans would face costs associated with data cleansing and electronic storage, potentially along with fees to integrated service providers.

"The consultation document barely discusses this issue and consequently schemes may not be aware of the likely additional costs that they will shortly be compelled to bear," it warned.

The pension dashboard project will 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.

The first one, a non-commercial service hosted by the Single Financial Guidance Body (SGFB), is expected to launch this year.

So far, the government hasn’t guaranteed that state pension data will be included in the pension dashboard in 2019 or that legislation to force providers to provide data will be introduced at this point.