Pensions Dashboards – delivering on data
In this article, following the recent conference joint hosted by Origo and identity platform specialist ForgeRock, in which we brought together a number of knowledgeable speakers in London and Edinburgh to talk around the outstanding issues to make Pensions Dashboards, I want to focus on a key issue, the delivery of data to the Dashboards and the challenges that poses.
Recently the total number of Defined Contribution pensions exceeded the total number of Defined Benefit pensions in the UK for the first time in pensions history. This is the result of declining open DB schemes and the introduction and success of automatic enrolment, which has served both to get people saving who may not have been saving before and increase interest generally in pensions saving.
At the London conference, Yvonne Braun, Director of Policy, Long Term savings and Protection, ABI, who also sits on the MAPs Pension Dashboards Industry Delivery Group, highlighted the very real positive of cross-party support for Pension Dashboards and the inclusion of a “Pensions Dashboards chapter” in the Pension Scheme Bill, backed by a Government majority in Parliament. “What that means to me is we can be pretty sure we will have Pensions Dashboards on the Statute Book,” she told the audience at the conference.
We could see around £20 billion in orphaned pension pots in the UK
Many of the speakers underlined the importance of making Pensions Dashboards a reality and putting relevant information in the hands of individuals sooner rather than later. The consequence of not doing so is that by 2050 we could see around £20 billion in orphaned pension pots in the UK. That is a situation which can be avoided if Dashboards can be got off the ground quickly.
Government also recently launched a consultation into the issues facing pensions providers in meeting the data needs to deliver consumer information to dashboards.
This is recognised as one of the big issues for providers, and was tackled at the conference, in particular the accuracy of the data which providers hold in their systems.
When Yvonne Braun put up a slide of a microfiche machine, she wasn’t joking about some of the challenges facing providers. The long-term nature of pensions data means it has been collected over many decades, so data resides in a mix of modern and legacy systems, many of the latter having been acquired over the years through M&A activity in the industry.
This, as Chris Connolly of Equiniti and Alan Clay of Experian expounded, means the data for one person could have been recorded in several different ways, through collection of limited information, errors through manual input and simply that more detailed data was not available at the time.
“If there is a foundation of poor-quality data then it doesn’t matter what technology you put over the top of it, it isn’t going to work”
The issues for dashboards which need also to be highlighted include sending the wrong data to the wrong person – false positives – but also false negatives, that is not being sure if the data is for a specific individual and so not sending the data when it really is them. Clearly, this risks undermining consumer trust in Dashboards as well as delivering on their purpose.
Hence, matching of data is crucial. “If there is a foundation of poor-quality data then it doesn’t matter what technology you put over the top of it, it isn’t going to work,” Alan Clay said.
“My plea to providers is begin to improve your customer data now so you are ready when dashboard does come in.” It is a plea providers will be no doubt be heeding following Guy Opperman’s reported comments this week that schemes should not be waiting for legislation to start getting their data in order, and there would be ‘Draconian’ penalties for those who do not.
Chris Connolly pointed to further issues, for example, where pension schemes currently provide valuations on an annual basis but under dashboards may need to deliver that more regularly, and whether the aim is for inclusivity over depth of data. From launch should Dashboards data be solely location of pensions, or should there be the ability for individuals to dig down deeper into their pension provisions?
Also, where should attention be turned first. Those who need their pension data most are those approaching or in retirement, who may have lost pensions that could be providing them with income. Should providers be focused on that generation first, Chris Connelly asked, or does the industry focus on the data that is accessible now and from here on in? That could risk writing off a generation of pension savers.
The positive collaborative approach
Clearly there are significant the issues that still need to be tackled when it comes launching the Dashboards. Data is one of them that needs highlighting and to which pension schemes need to turn their attention.
Industry has accepted from the start that to get dashboards done there would be work to be undertaken and bullets to be bitten. The positive collaborative approach that exists has got us to the point where the technology to drive Dashboards forwards has been developed and tested. Now, we have some of the hardest parts of the project to tackle but industry also has made clear its intent to help resolve and deliver on the outstanding elements of the project.
Origo and its collaborative partners are fully backing the project through our work and through bringing together key industry minds in these conferences to discuss the issues and help find solutions.
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