The Pensions Dashboards Programme (PDP), run by the Money and Pensions Service (MAPS), provide a full update today on the work they have done over recent months. Nigel Peaple, Director of Policy and Research at the PLSA explains what it means for pension schemes.
Today's pensions dashboards update outlines the origins of the project, the challenges involved, and how the Programme plans to take the project forward. It sets out the Programme’s thinking on a range of key issues, notably, the data required, the approach to implementation, and the degree to which it is possible right now to set a timetable for action.
The material published today includes the first tranche of documents on a substantive issue: data standards. For the uninitiated, the data standards will define the information pension schemes will have to make available to dashboards once they are compelled to do so by the Pension Schemes Bill. These papers cover two main areas:
- Data Scope or, in other words, the options for achieving comprehensive coverage across all pension sectors to deliver an acceptable early breadth of coverage for savers; and
- Data Definitions or, stated alternatively, the specific data items (e.g. pot size, estimated retirement income, etc.) that pension schemes could be required to make available to initial and future dashboards.
As a member of the PDP Steering Group, I am very pleased that both papers take an evidence-based approach that puts the needs of savers first and respects the practical challenges pension schemes are likely to face. I also welcome the fact that the Programme is committed to developing these standards in collaboration with the industry and through consumer testing. This is the sort of approach that is necessary to ensure dashboards work in the interest of savers.
Today’s documents make it clear that there is likely to be a staged approach to bringing schemes into the dashboard ecosystem, with no firm timeline established yet, and I firmly believe it is crucial that the vast majority of schemes are on board before the first dashboard goes live. Equally, the documents suggest that the type and volume of data schemes will have to make available will be phased, with a small number of common items being mandatory for all schemes from the moment they are ‘onboarded’. This is the right approach and will add value to savers whilst giving all schemes the time they need to get ready for dashboards.
The Programme has indicated that the maximum information initial dashboards will display is that which is currently available on annual benefits statements or on request. Indeed, this was one of the key parameters the Government set out, last year, in its response to the consultation on pensions dashboards. Some have argued for more information to be made available from the outset, but I believe the Programme’s approach is the right one for savers as the simplicity it offers will promote understanding. We know that bombarding people with information doesn’t lead to better retirement outcomes and there is no reason why dashboards will be any different.
One of my personal goals as a member of the PDP Steering Group has been to ensure that all types of pension scheme represented by the PLSA are able to contribute to the development of the dashboard ecosystem. Clearly, the present Covid-19 situation means that many schemes have more pressing matters to deal with than dashboards and I know that the Programme understands this. Indeed, it is one reason why they have decided to undertake the formal consultation on these matters in the Autumn rather than earlier.
Nevertheless, I would encourage you to contribute, informally, before then if you have the capacity to do so. I know the Programme team would appreciate any feedback you are able to offer. The MAPS Pensions Dashboards Programme has a lot more work to do, but the release of these documents illustrates the real progress that has been made in recent months.