Kim Gubler wants dashboards to be launched as soon as possible but notes challenges with personal data matching will mean the primary focus should be on ensuring pensions are correctly found not on displaying income amounts.
We launched our dashboards working group back in 2016 and have been a great supporter of the Pensions Dashboards Programme (PDP) since.
We have produced regular industry guidance as each development has been announced and seconded the chair of our dashboards working group to the Money and Pensions Service on a part-time basis. We are fully invested in and supportive of the development of dashboards as a crucial tool in improving member outcomes, education and improving the data issues which have long since restricted advancement in pensions administration. We firmly believe dashboards are extremely important to the future of our industry.
The UK needs dashboards and the Pensions Administration Standards Association (PASA) wants them to be launched as soon as possible, and successfully.
However, we anticipate there will be significant challenges with personal data matching. in recognition of this, we're recommending the primary focus should be ensuring pensions are correctly matched and found. This will mean dashboards will be safe for consumers, build confidence and discourage scams.
Where dashboards have been successfully developed internationally, these countries generally have unique national identification numbers. This isn't the case in the UK and means pensions will need to be matched on personal data items such as name, address, date of birth and national insurance number.
Those of us who work in the pensions administration industry - whether in statutory, trust- or contract-based arrangements - are aware there's an ongoing and longstanding issue with the quality of data received from sponsoring employers. This problem has increased significantly since micro-employers joined the pensions fraternity under auto-enrolment. These data issues are made even worse when members become deferred, when many fail to notify schemes of name and address changes.
Based on the PDP's estimates of six to nine million individuals using dashboards every year, there could be around 20,000 find requests from dashboards hitting every pension scheme every day. At this scale, false negatives and positives are inevitable (false negatives mean individuals won't see all their pensions on a dashboard; false positives mean they'll see one or more pensions belonging to someone else). But the PDP's October 2020 research with schemes and providers found ‘the true extent of the challenges with key identifier data may only become apparent when data providers [connect] with the dashboards ecosystem'.
PASA wants this ‘true extent' of data mismatches to be discovered across the industry as safely as possible, minimising the risks of pension scams and fraud.
PASA's preferred rollout option is for all schemes to be required to connect to the dashboards ecosystem in a short timeframe, giving a simple return of scheme name and contact details on positive matches. This would allow the true extent of mismatches to be properly understood, and all teething issues with the matching process to be ironed out before individuals see their various pension income amounts on dashboards. The alternative is a potential for income amounts to be returned to the wrong people (false positives), or not be seen at all (false negatives).
PASA's call for a safe, simple and soon roll out comes as the PDP published its proposals for dashboards staging on 27 May.
The PDP states: "Our call for input concerns the question of when, [but] in considering this, we encourage industry to also consider the ‘what' (data) and the ‘how' (digital architecture requirements)."
On the issue of what data is required, the PDP has restated its December 2020 position that schemes should return the mix of incomparable pension income amounts currently appearing on the wide variety of different defined benefit and defined contribution statements from pension schemes and providers.
On when the data is required, the PDP proposes all schemes and providers with 1,000 or more members would have to connect to the dashboards ecosystem in a 24-month window from April 2023 to March 2025. Smaller schemes would follow, and schemes could also opt to go early if they wish.
We believe safe reconnection (i.e. finding pensions) is the first goal. It's a big challenge, but we think industry can do this relatively quickly. We're testing this via our detailed dashboards survey we have launched today.
Despite government advocating extensive testing with consumers (in their 2019 consultation), PDP's data standard will show consumers inconsistent pension income amounts from scheme to scheme. By making the first ‘find' step simple and sooner, we believe this gives time to test and learn what simple, consistent, comparable pension income amounts pension savers can actually understand. This may make the overall process take a little longer, but it's crucial for dashboards to be a success. Better for people to understand what they see than to disengage with dashboards because they're confused.
We all need dashboards to be a success - the industry, government, but most importantly the people who will use them! We've been thinking hard about the best way to do this and believe ‘find all my pensions schemes' is the key first prize. Getting this up and running first, quickly and safely, is the right way to go, while we learn what savers actually understand when they look at pension figures.
Kim Gubler is chair of the Pensions Administration Standards Association
PASA is encouraging everyone in the pensions industry to complete the PASA survey here. The closing date is Friday 25 June.
PASA's detailed Dashboards Guidance published earlier this year can be found here and helps pension schemes and providers understand what they need to do when.