Pensions dashboards are a long-awaited service – they would allow information about a person’s UK pension(s) to be consolidated and presented online in one place
In principle this would include the State pension, public sector pensions, occupational pensions (both defined benefit and money purchase) and contract-based pensions (whether personal pensions or annuity contracts).
The Pensions Dashboards Programme (PDP), a working group established to design and implement the infrastructure to make dashboards work, published a Call for Input on 6th July building on two working papers published in April 2020 (covered later in this article).
The Call emphasised that the development of pensions dashboards will be supported by a process of feedback and research. It closed on 31st August.
Get data in order
Crucial to the PDP’s work is the development of data standards as the Government intends to compel pension schemes’ trustees and pension providers to comply with those standards.
Indeed, as we explain later, the Pensions Minister has warned schemes that they need to get their data in order.
Data Scope Working Paper
The first working paper set out options for achieving comprehensive coverage of all pension sectors in order to deliver what it deems an acceptable early breadth of coverage for individuals. It listed 12 pension sectors ranging from the State Pension through occupational pension schemes and personal pension schemes to buyout policies.
It looked at the Scope options of ‘Targeted coverage’ and ‘Broad coverage’ from the perspective of the intended purpose of the Dashboards. This is described as being in three stages, but the focus is only on the first two for now:
It is important to note that the Government has determined that initially dashboards will offer only a simple ‘Find & View’ function with some consistent basic information and would show, at maximum, the information already required under the Disclosure Regulations for annual statements or on request.
The PDP recognises that producing even the information for annual benefit statements may be particularly challenging for some defined benefit schemes, as many do not routinely produce annual statements for members.
The PDP asked about what proportion of existing pensions being shown would be acceptable in the early stages, and how many months delay would be acceptable before an individual subsequently found out that more of their pensions were available to view on their dashboard.
Data Definitions Working Paper
The second working paper set out the data items that will enable pensions to be found and that will then be presented to individuals on the dashboard once their ID is validated.
It set out a hierarchy of information to be provided based on the purposes that the dashboard was intended to meet. This hierarchy is as follows:
Levels 1a to 2a are needed to ‘Find and View’ with other levels helping people to ‘Understand’ their pension and potentially even to ‘Act’. The working paper then set out the data items that could fall into each level of the hierarchy.
The PDP asked about which data items would be most challenging for pension schemes and providers to supply, which were most difficult to provide digitally and how many months it would take to make them available.
Feedback from the industry and the PDP
A number of industry bodies have made public comment. For example, the Pensions Administration Standards Association called for the PDP to prioritise breadth of coverage over depth of information, stating that limiting the former “could impact adversely on consumer take-up of the dashboard”.
Its view was that it is important that “a very large majority of pensions are findable at outset. People are not going to know if an incomplete list is everything they have earned or not”.
The Pensions and Lifetime Savings Association stated that there should be “a well-defined timeline that gives schemes adequate time to prepare their data for onboarding and spread the cost of doing so over a manageable time period”.
The PDP’s Head of Industry Liaison published a blog confirming that it had received more than 60 detailed and comprehensive responses. He indicated three key learning headlines from the process:
Getting data standards right will be challenging – and they will undoubtedly evolve over time
Sophisticated approaches to matching will be required to enable full coverage
Estimated Retirement Incomes are key, but extremely problematic.
The PDP will publish the first version of data standards by the end of the year, for subsequent user testing. This means that pension schemes and providers can begin to act in earnest.
Capita comment
At the Society of Pensions Professionals Conference, the Pensions Minister was very clear that the pensions dashboard was a key medium-term priority and that was why the Pensions Schemes Bill had specific provision on it.
He was emphatic: we believe that this warning should be taken seriously and that schemes should no longer delay taking steps to get their data in order.
Please speak to your usual Capita contact for further assistance.