With opening of the new Elizabeth Line in London, PLSA Director of Policy & Advocacy, Nigel Peaple draws on comparisons with Crossrail to explain the timeline for connecting to, testing and – eventually – launching pensions dashboards.
The Pensions Regulator has been clear in stating at a number of recent industry events that it wants pension scheme trustees to act now to ready themselves for the pensions dashboards staging phase.
The PLSA is, and has consistently been, a supporter of pensions dashboards and the benefits they can bring to savers. But they need to be launched successfully to protect savers and schemes. There are challenges to resolving data issues that go beyond schemes simply rolling up their sleeves and working harder.
When it opens this week, after 14 months of live testing, the Elizabeth Line will be the world's first all-digital railway. Yet one of the reasons it can't launch immediately with direct services out to Reading in Berkshire and Shenfield in Essex is safe compatibility with older infrastructure on these lines. Ensuring this is safely at Elizabeth Line digital standards will take further extensive testing.
Like Crossrail, Pensions Dashboards is a major infrastructure modernisation project that will require extensive testing and upgrading before – as well after – initial connection and launch.
This article aims to help schemes prepare for dashboards by outlining the complexity behind cleansing and collecting data, explaining the difference between ‘connection’ and ‘launch’ and emphasising the need for extensive testing in-between.
OVERCOMING DATA CLEANSING AND COLLECTION CHALLENGES
There are a number of misconceptions about what readying data for dashboards entails. It is not as simple as going away and getting on with the job; in many cases schemes are reliant on employers for providing missing data or need the express consent of deferred members – many of which do not engage with pension scheme communications – to correct any data inaccuracies.
The good news is that there are steps schemes can take now and, as the dashboards project progresses, there are opportunities in the timeline where schemes will be able to get missing data directly from savers.
At launch, dashboards success will depend on two entirely distinct areas of data: accurate personal data to support successful matching; and available pension data to be returned to be viewed by users on dashboards.
What is not understood by many people outside pensions administration circles is that the accuracy of personal data is controlled by employer payroll interfaces received, and – once savers have left employment – by deferred members themselves.
Schemes can sometimes be sent incorrect data from employers, and deferred members often fail to notify schemes of changes. The Association of British Insurers (ABI) found only 4% of people tell their pension provider when they move house, for instance.
Research published by PwC in October 2020 for the Pensions Dashboards Programme found that the true accuracy of personal data held by schemes will probably only be identifiable once schemes are connected and users are using dashboards (i.e. post launch). This was also the experience in Sweden with its ‘My Pension’ dashboard.
In terms of improving the accuracy of personal data now, schemes can work with external agencies to identify potential issues (e.g. out of date surnames), but they then need the member's consent to confirm their up-to-date surname and update their records. There are challenges in seeking consent for these changes from a disengaged membership.
Post launch however, an engaged dashboard user, receiving a possible match response, can give their consent there and then to a scheme for their source data to be corrected.
And, in any case, correcting personal data now, as a one-off task, misses the point, because personal data is continually changing. Once pensions dashboards are launched, users will be able to continually maintain their personal data with pension schemes.
As to the question of pensions data, it is true that schemes can now be getting on with ensuring they can return the prescribed pension values for all their active and deferred records. However, the full extent of what they need to do will not be completely clear until the final regulations and data standards are published later in the summer and autumn – only around nine months prior to when the first schemes must connect to the pensions dashboards ecosystem. This is quite a challenge for the industry.
COUNTDOWN TO CONNECTION
One common area of confusion we have found in our conversations about dashboards is the difference between ‘connection’ and ‘launch’.
‘Connection’ refers to the process by which schemes will plumb their schemes into the dashboard infrastructure and open the tap to allow real member data to flow into the system. ‘Launch’, known to project insiders as the Dashboards Available Point (DAP), is the moment when all the different dashboards will first be made available to members of the public.
Different types and sizes of scheme will connect at different times. The process is known as ‘staging’ in the dashboards nomenclature.
The first window for staging commences on 1 April 2023 and will require only personal and stakeholder pension providers and those master trusts with more than 20,000 member accounts to connect. Large DC schemes that receive automatic enrolment contributions will be in the next window, starting from 1 July 2023 and so on. The PLSA has produced a document outlining all of the staging windows for different cohorts here.
The PLSA is not calling for this staging timeline to be pushed back, but rather, that there should be sufficient live testing from the end of the onboarding of the first cohort in June 2023 to ensure the launch of dashboards will be successful.
Our emphasis on testing acknowledges that we don’t know what data matching and user understandability issues might arise until the first schemes are connected.
The PLSA has asked Government, regulators and industry to work together to agree launch criteria for sufficient coverage of pensions, accurate data matches and user understanding. There will need to be a lot of analysis and collaborative working to agree both the criteria and the thresholds.
Example criteria:
- The ‘Coverage Rate’ i.e. the acceptable percentage of connected pensions to be searched / matched with users of dashboards;
- the ‘Find Rate’, i.e. the acceptable percentage of searchable connected pensions which are actually being successfully matched and found; and
- the ‘Understanding Rate’, i.e. the acceptable percentage of users who correctly understand what they see on dashboards so that they do not go on to take sub-optimal next steps.
PLSA currently estimates that it could take 12-18 months of such live testing from initial staging in June 2023 in order to meet reasonable and sensible thresholds for the launch criteria, but it could take longer.
CROSSRAIL AND DASHBOARDS
To return to our timely Crossrail/Elizabeth Line analogy, launching a modern digital service on top of older infrastructure is a very significant undertaking which takes time to ensure it works safely for users.
The central London tunnels were completed and began trial running in Spring 2021. This is analogous to the first cohort of schemes being connected to the dashboards ecosystem by end of June 2023.
At Crossrail, there have followed 14 months of increasingly complex trial operations to ensure the system is safe and can be launched successfully. Throughout this time, Crossrail has only been able to say that it will launch at "some point in the first half of 2022".
It wasn’t until after 14 months of really hard work testing, by very many different parties, that Crossrail was in a position to announce with certainty on 4 May that the Elizabeth Line will be open for the public on 24 May.
24 May is the Elizabeth Line's Dashboards Available Point. Before dashboards can reach that stage, we must be confident that scheme pension data is suitably cleansed and updated, and that extensive testing has proven it to be safe for the public to use.
While pensions dashboards might not get a royal opening, as an industry we must be certain that the public are given a new, all digital and state-of-the-art piece of infrastructure of which we can be proud.
Schemes of every type need to get ready for pensions dashboards, with the largest having only 12 months left to prepare. The PLSA has prepared this summary checklist of actions schemes should take now.
SUMMARY
- Like Crossrail, Pensions Dashboards is a major infrastructure modernisation project that requires careful preparation.
- Dashboards success will depend on two entirely distinct areas of data: accurate personal data to support successful matching; and available pension data to be returned to be viewed by users on dashboards.
- Schemes are often reliant on employers for providing missing personal data or need the express consent of deferred members to correct data inaccuracies.
- The true accuracy of personal data held by schemes will probably only be identifiable once schemes are connected and users are using dashboards (i.e. post launch).
- The exact requirements for pensions data will not be settled by Government until this autumn which leaves pension schemes a fairly short time to prepare.
- Live testing can begin at scale from 1 July 2023 once Cohort 1(a) is connected. At least 12-18 months testing will be required to reach agreed launch criteria. A launch target of "sometime in the second half of 2024" currently seems reasonable, but it could be later than this.
- PLSA is not asking for dashboards to be delayed, rather it is calling for them to be launched successfully. It hopes to work actively with Government and regulators to agree launch criteria and thresholds and then agree the rigorous period of 12-18 of extensive live testing required to meet these threshold criteria.
This article previously appeared in Professional Pensions.
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