Most (75%) pension schemes – both DC and DB – believe they will be ready to join the Pensions Dashboards initiative provided they have two years to prepare and various challenges can be overcome, a Pensions and Lifetime Savings Association (PLSA) survey has found.
The PLSA’s member survey found that most schemes (75%) already have a defined process for matching savers to their pension entitlements. However, there are several challenges associated with accurate matching, particularly where member data is not regularly updated by employers. For example, incorrect key identifiers, such as surname, which can hinder the matching process.
Government policy is that schemes will have to supply, at most, data available on annual benefits statements (or on request) to initial dashboards. Three quarters (75%) of schemes surveyed by the PLSA stated that they should be able to make this data available within 24 months. This is encouraging, but the onboarding timeline should not be designed to suit the capacity of the simplest schemes – it needs to be flexible enough to cater for those schemes that might need more time to prepare.
For example, only about half (48%) of DB schemes currently provide information on the accrued rights of deferred members as part of the annual benefit statement (this is not a legal obligation) so a requirement to provide them for the Dashboard will take some time to address. Moreover, dashboards will be of most use to savers if they can see all their pensions.
The PLSA continues to believe that it is important for initial dashboard to show an estimated retirement income for individuals’ pension entitlements. This is to ensure that savers are able to view data about their entitlements that is consistent and comparable. It is also essential that Dashboards include all accrued entitlements, and special features such as spouse’s pensions or guaranteed annuity rates, so they can fully understand their retirement income.
Nigel Peaple, Director Policy and Research PLSA, said: “We have long been a strong supporter of the Pensions Dashboard and believe it is key to helping improve saver engagement with their pensions and helping them plan their retirement income.
“Our survey shows pension schemes are already well-placed to become an active part of future pensions dashboards. The progress schemes have made in addressing the data challenges they face is highly encouraging, particularly given current circumstances. That said, we should not pretend that real challenges do not remain and we need to give the industry time to ensure data is complete and accurate.
“The Pension Dashboard should connect people with all their pensions. We have concerns that launching with too few participating schemes will provide savers with an incomplete picture of their pension entitlements and present very real risks to users. Initial dashboards should show – at launch – all or very nearly all the benefits members have accrued or the project may fall at the starter’s pistol.”
Click here to download the PLSA’s consultation response.
Mark Smith, Senior PR Manager
020 7601 1726 | [email protected]k
Steven Kennedy, PR Manager
020 7601 1737 | 07713 073024 | [email protected]