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Steve Webb: How to save the pensions dashboard

The pensions industry is suffering from “dashboard fatigue”. There seems to be another delay at every stage of this project, including almost a year of lost time when the Department for Work and Pensions appeared to be on the brink of pulling the plug.

Now we have another hold-up as we await a pensions bill which will make it mandatory for schemes and providers to supply data to the dashboard. And even when that legislation has completed its passage through parliament, there will be another three to four years before all schemes are required to participate.

We need to give the dashboard project a shot in the arm that will enable it to regain public trust and credibility.

I have a simple suggestion to put the project back on track. It is one I will be sharing with the highly respected Pensions Policy Institute head Chris Curry, who is now going to be the “dashboard tsar” charged with driving it forward.

One of the biggest selling points around the dashboard is that it will help unite people with their lost pension pots. Many will have worked for multiple firms and built up multiple workplace pension pots, as well as individual pension savings.

Very often, it can be hard to keep track of these pensions, especially as former employers go bust or get taken over, or as pension providers and administrators are changed, renamed and merged.

Ian McKenna: The rule threatening to undo the pensions dashboard

Scheme members themselves move house or change their name, which further adds to the problem of matching people to pots. A huge prize therefore would be to deliver a simple list to each citizen of all the pension rights they hold.

One thing that will delay the production of such a list on a dashboard is the need to present pension values. For instance, it may require considerable work for defined benefit schemes to produce up-to-date valuations of rights for their millions of deferred members; work which they might not have otherwise done until the individual reached retirement.

But what schemes could do much more quickly is supply a list of scheme members, identifiable just by name, date of birth and National Insurance number. This would not be perfect, but would be far easier to compile than up-to-date valuations.

People would be queueing up to visit the dashboard to find out what they had got. Before long, many hundreds of thousands would be reunited with lost pots, some of which would be relatively large.

Soon, there would be positive stories about people finding missing pensions, and the dashboard would become a destination website as information was added. Contrast that with the current scepticism and weariness over the project.

There would, of course, be much more to be done once this initial list had been constructed.

But the good will and momentum this two-stage process might generate would help to ensure the project was seen as a success.

Steve Webb is director of policy at Royal London

You can follow him on Twitter @stevewebb1

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Director of Policy at Royal London who still thinks he’s at the FCA!

  2. Christopher Petrie 3rd July 2019 at 1:18 pm

    He was never at the FCA!!

    He was an MP!!!

    But the problem is that until ALL schemes are included, including the State Pension, the dashboard will get a bad name as an incomplete picture.

  3. This is desperately needed sooner rather than later. It is one of the most frequent questions I get asked when running group education sessions. It is not just the older generation who struggle to locate old plans but now the younger due to auto enrolment success. Even if data isn’t complete at outset, it’s a great step in the right direction!

  4. The historical problem you have is the varying rules, regulations and standards between various parts of the pensions industry.

    EG: Most Contract based pensions are required to send the customer an ABS 1/year but Trust based only if requested. By sending regular communications (proactively tracing people if required) means people are less likely to lose touch with their pension and be more aware of it.

    Hopefully the new legislation will endeavor to recognise the need for all types of pensions (Trust, Contract and State) to meet the same standards and think about how this will fit into the pension industry now and in the future.

    If arguing for the dashboard, this combination of data will make it easier for individuals, apps and pension services to make use of this data which, if done correctly, will also reduce costs, potentially remove the need to send ABS’s, help flag AA/LTA issues, etc.

    If arguing against it, then one could say this is a bit nanny state and the pension admin and individual should make a better effort to keep in touch with each other (is there any other industry that has this kind of central database of products?).

    Also, how would this fit in with existing platform/ dashboard services individuals can use for their finances?

    Also, if looking at the long term structure of pensions going forward why not consider developing a pension system where the indiviual choses their pension (if they don’t still have ER default) as they would for a bank account where they want their salary paid.

    With this system and to simplify cont. payments then perhaps using HMRC as a kind of clearing house to manage/ check cont’s and tax relief which would simplify the process for all parties (ER-by adapting and using the existing PAYE systems, provider – by adapting and using RAS systems and EE – by adapting and using HMRC or provider online systems), except HMRC, but then it’s their rules that make much of it complicated so it might incentivise them to simplify these if they were required to build the necessary systems and checks.

    The industry in general needs to have the same standards for people to access their data the same way they can with bank accounts or platform dashboards.

    I also don’t see why DB can’t do this given most won’t even have to update on a daily basis the same way as DC.

    With a project this size, the complexities of pensions and old systems that may still be out there then it’s likely this will be a phased project whether this is by starting with simple data as mention in this article or by another priority such as pension type.

  5. Mr Boleyn PFS 5th July 2019 at 8:31 am

    Have to agree 100 per cent with Steve Webb. It would be entirely sensible for legislation to be passed to require all pension schemes to provide a complete list of all members of their schemes by full name date of birth and ni number. This should be stage 1 only towards the goal of providing the comprehensive information necessary to give a pensions dashboard full functionality so that consumers gain a summary of all their pensions. As long as the systems architecture of the dashboard is designed to incorporate the more detailed information to follow, then surely there is no reason to delay passing legislation to insist on both DB and DC pensions providing this basic member information? Currently TPAS and MAPS get a considerable number of enquiries from people who mistakenly believe there is a central database where their pensions can be traced. Maybe this should be the first milestone the dashboard project should hit on the path towards a fully functional model?

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