The Pensions and Lifetime Savings Association (PLSA) is fully supportive of the Pensions Dashboards project but without Government and the industry addressing a number of uncertainties and important dependencies, schemes’ delivery against the proposed staging timeline appears ambitious.
In its submission to the Pensions Dashboards Programme (PDP) Staging Call for Input, the PLSA said it strongly supports pensions dashboards' goals of helping savers locate their pensions, increase their awareness of their different pensions by seeing them all in one place and help them take greater ownership of their financial provision for retirement.
However, because there are so many significant areas of uncertainty, assumption and dependency, PLSA members find it extremely difficult, or are unable, to estimate how long they will need to be ready to connect to the central pensions dashboards architecture. Therefore, we believe that the current PDP proposal that staging should start in April 2023 looks highly ambitious, as does the assumption that large DB schemes should begin to stage around the end of 2023.
More positively, the PLSA does agree with the order of staging. By starting with large Master Trusts and GPP providers, the PDP is likely to get a very large number of savers onto dashboards very quickly. However, it will be important that regulators take a flexible approach to compliance. In addition, in light of the mixed DB and DC provision of those most likely to use pensions dashboards (international evidence suggests people in their 50s and 60s), we agree it makes sense to try to stage DB and public service schemes as soon as possible. Again, a flexible approach will be needed.
Uncertainties and Dependencies
Whilst PLSA member schemes are keen to comply and help make dashboards a reality, their ability to do that is, in the main, very largely dependent on their existing administration system providers or third-party administrator being willing and able to act as their integrated service providers (ISPs). This is a critical dependency.
Furthermore, no integrated service providers have yet connected to the dashboard’s central digital architecture (CDA); indeed the architecture does not yet exist, nor has its supplier yet been procured. Detailed technical specifications for the application programming interface (API) that service providers must use need to be developed, tested and published.
Any estimates for timelines are all based on the critical assumptions that the CDA is procured, built, tested, and API specifications published, and then ISP services are developed, connected and tested, including on key issues such as security and performance.
Moreover, the interaction of the new dashboards legislation and existing data protection law has also not yet been devised. This will be critical before any schemes can start meeting their dashboards compulsion duties.
A further important uncertainty is the exact requirements for what pension data should be shown on the dashboards. Because estimated retirement income information provided on schemes’ annual statements is based on differing assumptions and is not consistent between providers, presenting different income estimates alongside each other on dashboards would be confusing, misleading and generally off-putting to users.
To make Pensions Dashboards a success, the PLSA believes there is a critical need for extensive testing of what most users can understand. Only once this testing has been completed should the ‘View’ data be settled in the PDP standards, and only then can estimates be provided by industry of the time needed to achieve connection. We are pleased that MAPs PDP intends to undertake user testing later this year, but we believe that it is unlikely to have answered all the questions in time to meet the current proposed Staging timeline.
PASA’s ‘Find’ first approach
Given all the uncertainties and the delivery risk, many PLSA members favour PASA’s proposals that involve launching “Find dashboards" first – dashboards which show all the pensions a person has rather than the value of the pension – as these would allow more time to ensure connecting to dashboards works correctly, and more time to agree the right way to display pension values. If rapid progress is made, it may be possible to do both these steps within the overall timeline proposed by the PDP but, as noted above, right now it is not possible to be certain of this.
Nigel Peaple, Director of Policy and Advocacy, PLSA said: “Pensions Dashboards have the power to transform savers’ awareness of their pensions and ultimately lead to better retirement incomes. However, even with the best endeavours of the pensions industry, there remain a number of significant areas of uncertainty, assumption and dependency that must be resolved before a firm timeline can be set for connection to the central pensions dashboards architecture.
“We are enthusiastic about Pensions Dashboards and will be offering as much support to the PDP as possible to resolve the identified issues, but a flexible approach to staging is likely to be needed.”
The full submission is available via the PLSA website.
Mark Smith, Senior PR Manager
020 7601 1726 | [email protected]k
Steven Kennedy, Senior PR Manager
020 7601 1737 | 07713 073024 | [email protected]