The Information Commissioner’s Office is engaging with the Pensions Regulator to clarify the current rules involving member communications, as schemes and providers believe existing legislation prevents them reaching out.
In a letter to the Work and Pensions committee chair Stephen Timms, published on June 8, the minister of state for media, data and digital infrastructure Julia Lopez stated that better “regulatory guidance should provide the clarity that pension providers need”.
The issue has been raised by Timms after evidence to the committee’s third stage of its inquiry into pension freedoms, looking into savings for later life, where schemes stated they “are restricted in their ability to communicate helpful information to their members”.
In his initial letter to Lopez, sent on May 18, Timms said that one reason is the challenges posed by trying to balance the requirements of the Privacy and Electronic Communications Regulations 2003, legislation which gives individuals specific privacy rights in relation to electronic communications, with guidance from TPR in its defined contribution code of practice, which states good member communications “are vital if members are to engage and make decisions that lead to good outcomes in retirement”.
Timms gave the example of the Universities Superannuation Scheme, providing defined benefit and DC pensions, which told the committee they have been “materially impacted on their ability to communicate helpful information to scheme members and to maximise the benefits of investment in the scheme website, member portal and online functionality”.
USS trustees have proposed to extend the ‘soft opt in’ in the PECR, currently only available to commercial organisations, to non-commercial organisations, but also for it to specifically cover information gathered via auto-enrolment, Timms said.
The ‘soft opt-in’ means businesses may generally only contact individuals who have previously been in touch during a sale or transaction, and have not refused or opted out of receiving marketing communications about similar products.
The committee chair also mentioned written evidence from Aviva which cites the regulations as an obstacle to boosting uptake of advice and guidance.
The provider stated: “We can build very effective propositions and tools to help customers, but if we can’t tell customers about them, they won’t use them.”
In her response, Lopez clarified that the current legislation “does not prohibit pension companies from providing key customer service and administrative information to the pension policy holders, such as factual information on how much their pension is worth”.
She hopes the current engagement between ICO and TPR will be sufficient to solve the issue, “but if it does not have the desired effect, I would be open to exploring whether changes to the PECR legislation are needed to address unnecessary barriers to responsible data processing”.
Maria Espadinha is editor of FTAdviser's sister publication Pensions Expert
