The industry has welcomed the updates on the pensions dashboard published today (8 April) by the Pensions Dashboard Programme (PDP) at the Money and Pensions Service (Maps).
The update has been published alongside two working papers, outlining the scope and type of data to be included in the dashboard, though these will be subject to further industry consultation “when the time is right”.
The proposals outlined by the PDP have identified a broad coverage, focused data approach as the most likely to achieve the desired results for the ‘initial’ dashboard, with plans for deeper data to be introduced in the future.
Commenting on this, ABI director of policy, long-term savings and protection and Pensions Dashboard Steering Group member, Yvonne Braun, stated: “The proposal to prioritise broad coverage initially over depth of data is sensible to get dashboards up and running as quickly as possible, given people have a variety of pension arrangements, and the need for dashboard users to find all their pensions.”
The approach was also praised by Hargreaves Lansdown senior analyst, Nathan Long, who argued that the pension dashboard looked set to come into the world as a “turbo-charged pension finder service”, with the addition of more detailed information “down the line”.
“This approach looks the right one,” Long explained, “as it’s most important for people to remember where all their pensions are when they come to retirement and ensure none of their old plans, from a long forgotten employer, slip through the net.
“Expectations need to be managed, with those expecting pension dashboards alone to turn us into a nation of savvy pension savers likely to be waiting an awfully long time.
“It also means that any expected drop in the cost of financial advice due to the efficiencies of information being available in one place look at least a decade away. Focusing on helping people to make good decisions with their money now, by plugging the guidance gap looks increasingly more important.”
This was echoed by the Pensions and Lifetime and Savings Association (PLSA), who praised the “evidence-based approach” for putting the needs of savers first, whilst also respecting the practical challenges schemes are likely to face.
As part of the effort to meet user needs and expectations, the PDP has now confirmed that the dashboard will only be made available to the public once there is sufficient data, identifying this as the dashboard available point (DAP).
It estimated that the DAP could fall anywhere between 40 and 90 per cent of pension data being included on the dashboard, and plans to undertake extensive research to assess what proportion would be ‘acceptable’ to individuals.
Society of Pension Professionals president, Paul McGlone, agreed that this was a “sensible and pragmatic way forward”, arguing that to be worthwhile, most dashboard users should have access to “decent information on most of their pensions”.
“But that simple concept comes with challenges,” McGlone added, “particularly for DB schemes, such as providing Estimated Retirement Income.
“Not challenges to derail the project, but challenges that as an industry we have to work to overcome.”
The importance of facing these industry challenges was also cited by Aon partner, Gary Cowler, who described the recognition of the different circumstances of schemes, and the differentiation of the data sets, as a “sensible and positive step”.
He continued: “The biggest challenge we see with the proposals is in providing – within the first phase – estimated retirement benefits at a current date for DB schemes.
“This will be a crucial area of consideration as, although the data exists to calculate this for each member, most schemes do not hold their data in a way that could currently support this.”
Cowler stressed that to make this available for every DB member in a “meaningful way” would be a “major exercise” for pension schemes.
He also emphasised that whilst trustees broadly support the aims of the dashboard, they will need to balance this against immediate challenges.
Drawing attention to the existing pressures on administration teams, such as GMP related work, Cowler highlighted that many schemes and sponsors are now also having to contend with financial pressures caused by the Covid-19 pandemic.
He added: “It is therefore important that the industry debates whether a challenging project of providing estimated retirement benefits for all members of DB schemes is a both a priority in the short-term and as phase one of the dashboard.”
The PDP report acknowledged the impact that the current crisis has had on pension schemes, delaying plans to consult on the proposals outlined in the papers as a result.
PLSA director of policy and research, Nigel Peaple, agreed that PDP was right to defer the consultation considering the “exceptionally challenging environment posed by the Covid-19 pandemic”, highlighting that a postponement would ensure “extensive and deep engagement” with the sector.
This was echoed by Pensions Management Institute (PMI)president, Lesley Carline who stated that while the lack of certainty on timings was “obviously disappointing”, it was also “unavoidable”.
Carline urged the industry to support efforts where possible in the meantime, emphasising that the onus to provide constructive input and feedback is on the indsutry.
Braun agreed, calling on the industry to “look closely at the proposals” as they begin to define the data required to operate pensions dashboards.
Aegon head of pensions, Kate Smith, concluded: “In the meantime, many pension providers and schemes are already able to interact with their customers digitally, and the current crisis has clearly shown the benefit of this. State pension information is also available online. So many savers are able to keep connected to their pensions.
“It is possible that in response to the crisis, we’ll see accelerated progress in making more pensions digital which will be helpful once the pension dashboard programme restarts engaging with the pension industry.”
— to www.pensionsage.com