PensionsMay 1 2019

Dashboard still has ways to go

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Dashboard still has ways to go

In a period where every government policy is crowded out by “the Tory psychodrama of Brexit”, as one MP called it, you could wonder whether the pensions dashboard might have been kicked into the long grass.

Heralded by the Treasury in 2016 as a milestone among the Conservatives’ pension reforms, it has been in the pipeline for some time, though ministers had been notably quiet on the launch since December.

This would be expected for a project with multiple moving parts, which include 200 pension providers and planning the exchange of millions of pieces of information in real time, but in the current political climate it was always going to be submerged.

On April 4 some news emerged – it was going to happen.

The Department for Work and Pensions confirmed that work and pensions secretary Amber Rudd (pictured) had given the green light.

The government’s plans include a commitment to bring forward legislation “at the earliest opportunity” to compel all pension providers to make consumers’ data available through a dashboard.

On April 4 some news emerged – it was going to happen

There is an expectation that most schemes will be ready to go live with their data within a three to four-year window.

State pension information will be included “as soon as possible”, according to the DWP.

The government is also backing the development of multiple industry-led dashboards displaying the same basic information.

Initial models will be tested from this year and the single financial guidance body, now named the Money and Pensions Service, will deliver a non-commercial dashboard.

The guidance body is also bringing together an industry delivery group to set out a timetable and standards, as well as mechanisms to ensure security over users’ data.

Adviser view

Ricky Chan, director at IFS Wealth & Pensions, says the dashboard will save time for advisers and clients and might help clients who have lost contact with their old pension providers.

He says it may increase the likelihood of companies offering guidance remotely, for example through Skype.

However, Mr Chan notes: “It wouldn’t save time on the important areas, which include discussing what’s important to the clients, their longer-term objectives and their retirement plans.

“I’m sceptical of the depth of information that is actually available on the dashboards; I doubt they’d be as detailed as advisers would want them.

“It’s likely advisers would still need to send off a letter of authority to the respective providers to obtain all the information, which takes time and lots of going back and forth.”

Mr Chan gives the example of defined contribution pensions, adding: “I’m unsure if information relating to charges or certain guarantees would be included on the dashboard, so it would require further clarification from the provider.

“For preserved defined benefit pensions, the pension income figure may only be from the ‘date of leaving’ the scheme, and may have no information relating to death benefits or early retirement penalties. Again, this would require further clarification.”

Optimistic on dashboard

Some of the organisations driving the dashboard forward are bullish.

Yvonne Braun, director of policy, long-term savings and protection, at the Association of British Insurers, says: “The digital retirement revolution is here at last.

“Leading a cross-industry group of pension providers and schemes, the ABI has put years of work into making dashboards happen and we can’t wait to see these vital services in action.”

Nigel Peaple, director of policy and research at the Pensions and Lifetime Savings Association, says: “We fully support the government’s recommendation that the initial phase should involve a non-commercial dashboard hosted by the [Money and Pensions Service] and that the state pension should be included as soon as possible.”

While the benefits for clients have never been in doubt, the point about state pension information has exercised many.

Kate Smith, head of pensions at Aegon, said: “While it’s great to get confirmation that the state pension will be included, it’s concerning that there is no timescale or deadline being set for this being delivered.

“For many people the state pension forms the core of their retirement plans and is needed for the pensions dashboards to provide the fullest and most accurate account of someone’s pension savings.”

There is no clear date yet that the government has eyed up as a deadline to include state pension information.

When pushed for a timeline, the Money and Pensions Service, which is replacing the Money Advice Service, indicated that it is too early to say.

Right now, the government body is convening a delivery group to deliver the technical architecture for dashboards to work.

Once an industry steering group is formed, the rest of the industry and independent financial advisers will start to get timelines.

The Money and Pensions Service is now interviewing for the roles of principal and implementation director for the steering group and once they are appointed, a roadmap can be created.

Sticking to a plan with set dates is not exactly a government forte at the moment, but the pensions dashboard, it seems, has reached a point of no return. Any U-turn would be too damaging for the government now.

Provider challenges

While momentum is building after a couple of stalls, pension providers are enacting plans with several operational hurdles, not least data security.

Ms Smith notes: “There’s a lot of work that will be required to ensure scheme information is accurate, secure and available within the suggested three to four-year window.

“A phased approach for schemes releasing data to dashboards comes with its challenges, as it risks people being unable to find all their pensions from the start.

“But starting small with basic information and growing to provide more complex information looks like the right solution.”

Whether they have DB, DC or state pension schemes, clients will – eventually – see on their dashboard what they have saved so far, plus an estimate of what this may be worth in future.

Presenting this information coherently and conveniently to customers will require a system that sends automated messages to more than 200 pension providers and administrators, which collates responses and sends them back to the various websites hosting a dashboard.

This is the Pensions Tracing Service, one of the crucial elements that retrieves an individual’s pension information in an instant.

It is likely the data used to retrieve information will include national insurance and dates of birth, so one of the steering group’s critical challenges will be ensuring the channels carrying that data are secure.

There is also perhaps a question around who will ensure the information is constantly kept up to date. Ultimately, there are enough evangelists behind the project to make it work.

David Woollett, head of customer strategy and oversight at Phoenix, calls it “a real game-changer for customers and their engagement with pensions”, adding, “in time, this could even see the end of the industry-wide issue of lost pension pots”.

Key points

  • The DWP has confirmed that work and pensions secretary Amber Rudd had given the green light on the dashboard project
  • Doubts exist about the amount of information available on the dashboards
  • The system will need to send automated messages to pensions providers

Marcel Le Gouais is a freelance journalist