On the go: The government is facing growing calls to “come clean” about what data is required from pension schemes and providers for the pensions dashboard so that the industry can prepare properly, following conflicting reports.
Former pensions minister Steve Webb, now partner at LCP, has warned of a potential multimillion-pound dashboard compliance bill, given the variation in existing data that defined benefit and defined contribution schemes supply to members. He said the government needed to be “much clearer on the approach planned”.
As reported by Pensions Expert in April, trustees and administrators are faced with a major data exercise to ensure the data they hold conforms to standards announced by the Pensions Dashboards Programme.
Sir Steve pointed out that, in an earlier response to the consultation on the dashboard, the government claimed that schemes involved in the first phase would “at maximum” be asked for “the information already available on annual statements, or on request”.
But in an ongoing consultation due to close next week, the PDP is considering data standards setting out that the public will expect a dashboard to show the “expected retirement income” from each pension they hold.
“The pensions dashboard is a very important initiative, but the government needs to come clean about what is involved. If it really intends the dashboard simply to be a cut-and-paste from existing statements, then the information on display will be utterly inconsistent between different pensions,” Sir Steve said.
“Assuming that this is not what is planned, schemes will instead have to do a huge amount of data manipulation to get data in a standardised format for the dashboard.”
In one example, he said that a DB scheme might give a pension figure based on service to date or assuming continued active service up to retirement. He added that it was also common for DB members to have “different slices or tranches” of entitlement, which are listed separately in some statements and lumped together as a single figure in others.
The issue for DC schemes is that, while trust-based DC pensions provide projections based on rules set by the Department for Work and Pensions, contract-based DC schemes are projected on Financial Conduct Authority rules.
Sir Steve said that the cost for schemes of presenting values on a new basis for all active and deferred members will be “huge”, particularly where data is not currently well organised, and urged the government to be “much clearer about which approach is planned so that schemes can prepare properly”.
