On the go: Pension schemes will be allowed up to four years to submit data to the pensions dashboard, sparking concerns that services appearing later this year will not be comprehensive.
Responding to a consultation on its plans for the project, the Department for Work and Pensions said industry should create and test dashboards this year.
To enable this, the industry delivery group, overseen by the Money and Pension Service, will develop a roadmap for delivering the necessary infrastructure, set standards for data presentation and security.
There is very little evidence that third-party pensions administration firms, who support 80 per cent of the DB market, are currently taking specific action to improve data quality for dashboards
Duncan Howorth, ITM
Meanwhile, the government will legislate to compel schemes to submit data to the service “at the earliest opportunity”, according to the DWP. However, compliance will be enforced in stages, and the consultation response advises schemes that they have between three and four years.
Hailing the arrival of dashboards, Amber Rudd, secretary of state for work and pensions said in a statement: “This matters as for too long, pensions have been obscure, hard to understand and inaccessible to many. Pensions dashboards will change this.”
Industry underprepared
Ms Rudd’s green light for dashboards was met with concerns that the retirement sector is far from ready for the project.
The lack of preparedness of providers was revealed in an exchange of letters with Frank Field, chair of the Work and Pensions Select Committee.
In the letters, Duncan Howorth, executive chairman at ITM, said: “There is significant industry scepticism that the voluntary non-commercial dashboard will be operational in 2019, or early 2020, leading schemes to deprioritise preparations.”
He added: “There is very little evidence that third-party pensions administration firms, who support 80 per cent of the DB market, are currently taking specific action to improve data quality for dashboards; indeed, some are questioning whose responsibility, and at whose cost, this is (i.e. trustees or administrators?).”
However, some large schemes are showing interest in participating, he said.
“The most vital piece of the jigsaw left is to make it a legal requirement for all providers and schemes to share the necessary date to deliver a comprehensive eservice,” stressed Dr Yvonne Braun, director of policy for long-term savings and protection at the ABI in her correspondence.
She added: “We strongly believe that incomplete dashboards could present a risk to consumers. However, consumer research conducted by the ABI-led project showed that consumers would find temporarily incomplete data acceptable, provided this was for a short period only.”
Reputation at stake
Some industry commentators have expressed concerns that initial dashboards may damage their reputation by not providing a full service to consumers.
If it is rushed, or we don’t have all interested parties on board from the beginning, there is a risk that we will not be able to deliver something meaningful or credible and the opportunity to engage people will be lost,” said Helen Morrissey, pension specialist at Royal London, in anticipation of the consultation response. “In addition, the government’s plan to provide a link to state pension is simply not good enough - pressure needs to be put on HMRC to get the state pension data integrated from day one if the dashboard is to work.”
Meanwhile David Brooks, technical director at Broadstone, said compliance could be a challenge for defined benefit schemes.
“The main item to note is the clear steer to ensure your data is in good order and able to comply as the provision of data to the dashboard will be compulsory for all schemes,” he said.
“We don’t yet know what pension value number schemes will have to supply but having data in a format that can be easily exported and sent across to the dashboard will be something trustees will need to comply with,” Mr Brooks continued. “They have been warned that they have three to four years to comply. This could be a major challenge for many schemes.”
Brexit could put brakes on
There is also the question of when legislation will actually appear. With no end in sight to the Brexit question dominating politics and the threat of a general election, it is hoped that cross-party support will see dashboards introduced, but this could be later than anticipated.
“Introducing Pensions Dashboards has clearly been shunted down the priority list as the vice-like grip of Brexit on Parliament grows ever tighter,” said Tom Selby, senior analyst at AJ Bell. “In the current political climate there is no guarantee the Pensions Bill needed to compel schemes to provide data to Pensions Dashboards will see the light of day in 2019.”
