Enormous amounts of work are still required in order to deliver the pensions dashboard. Ros Altmann looks at the issues involved and urges politicians not to abandon the idea of an independent public dashboard.
There has been much excitement about the prospect of an online pensions dashboard helping pension savers to see all their pensions in one place to enhance their retirement, yet despite the government's promised delivery by 2019, the serially delayed project remains a long way off.
Acknowledging its timeline would not be met, the government tasked the Money and Pensions Service (MAPS) with the pensions dashboard delivery project last year, leading to the formation of a group now known as the Pensions Dashboards Programme (PDP). Chaired by the much-respected Pensions Policy Institute head, Chris Curry - and supported by industry, FinTech and consumer representatives - the PDP's latest progress report (see: bit.ly/3bdamWB) makes it abundantly clear we are nowhere near seeing any pensions dashboard. Even more worryingly, the report raises the possibility of there being no public service dashboard at all.
The costs and complexity of producing pensions dashboards were woefully underestimated. Enormous amounts of work are still required and the Covid-19 crisis will add further delays.
Over the past four years even the initial essential steps have not been finalised. For example, underlying pensions data, on which reliable dashboards crucially depend, are riddled with errors. After ten years of grappling with this, defined benefit scheme data reconciliation remains incomplete. For defined contribution pension plans such projects are embryonic.
Regulators have only recently begun seriously focusing on this issue. Legacy scheme errors are unsurprising, as accuracy audits were not demanded and manual or paper administration was the norm. But far more astonishing is that regular data accuracy verification reports are not mandatory for modern auto-enrolment schemes. Even the most recent pension records are often incorrect. Without accurate information, how can consumers rely on a dashboard?
Tracing, verifying and amending past data may be impossible for some historic schemes, with paper records and missing files, but providers must at least attempt these essential pre-requisites. More recent contributions should be easier to verify, but the longer this is left, the harder the task. Pensions administration was always considered a low-cost service, but significant sums will now have to be spent.
The Pensions Regulator should ensure all auto-enrolment pension records (contributions made since 2012) are urgently audited - verifying and correcting each member's name, address, birth date and National Insurance number, and checking past earnings figures and scheme rules. Without knowing pensionable pay, and contribution terms, accuracy of each contribution cannot be confirmed. And this massive task is only a first step.
The PDP's progress report also highlights the need for agreed industry data standards. What a shame that pension providers rejected the 2015 Pensions and Payroll Data Interface Standard (PAPDIS), developed after much hard work. Devising new standards, agreeing which data items the dashboard must display, and the vital but herculean task of reliable and secure identity verification which is not in place, will all take time - perhaps three to five years or more.
The report by the PDP also reveals a further disappointment. This group will not actually be delivering a public service dashboard at all. That work will be the responsibility of a separate MAPS project.
Meanwhile, private firms may establish their own competing dashboards. This raises the worrying prospect for consumers that a comprehensive, independent public dashboard may never be delivered. In 2018 the government rightly declared that a non-commercial MAPS dashboard was required alongside for-profit private dashboards, to offer "an impartial service to those who prefer it". That decision must not be abandoned.
I believe the risk of detriment from leaving consumers wholly reliant on only private sector dashboard options is significant. If existing providers can capture customers for their own services, without access to a comprehensive, unbiased version, the consumer benefits of the pensions dashboard are diminished.
Therefore, I hope that the Pension Schemes Bill, currently progressing through parliament, will ensure a public service dashboard must be up and running before permitting private sector dashboards. Ministers have seemed reluctant to commit to this. I do hope the imperative of consumer protection will prevail.
Baroness Ros Altmann is a former pensions minister
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