The great pensions dashboard reset

Currently limited to schemes with more than 100 active and deferred members, the dashboards will offer contact details of administrators, fuzzy matching for “possible” matches, and up-to-date values of both defined benefit and defined contribution arrangements.

All will be viewable – without charge – through the Money and Pensions Service dashboard. 

The plan has been for a big bang approach, with all the dashboards’ functionality going live at one time. But given the track record of previous large technology projects – both public and private – delays were inevitable. 

Another delay to the programme is disappointing, but it presents the industry with an opportunity to regroup and ensure the final product is something that really works and delivers real value to consumers

Another delay to the programme is disappointing, but it presents the industry with an opportunity to regroup and ensure the final product is something that really works and delivers real value to consumers.

Dashboards will be a game-changer

The pensions dashboards will be incredibly useful for savers. Quantitative research by the Pensions Dashboards Programme suggests that 55 per cent of UK adults aged 18 to 75 had undertaken no pension engagement activities in the previous year, and only 25 per cent had read an annual benefit statement. 

According to the Pensions Policy Institute, there is an estimated £26.6bn sitting in unclaimed, dormant or lost pension plans — this figure rose by 37.7 per cent between 2018 and 2022.

This issue is likely to increase with employees being auto-enrolled into pension schemes. 

On average, 9 per cent of people changed jobs each year between 2000 and 2018, according to the Office for National Statistics. Will they be able to keep track of each of their pensions, evaluate estimated retirement income and manage decumulation appropriately in retirement?

Other countries have developed pensions dashboards, including Australia, Sweden and the Netherlands. We know that they can be built and are valuable, but how do we build something as good – if not better – than already exists?

Building the best ecosystem 

The pensions dashboards has several functions. The core of the programme is infrastructure being built by Capgemini and Origo that will allow savers to log into a dashboard securely and send a request to all administrators. 

This request then goes out to both the largest insurers and the smallest administrators running a 100-member scheme on a spreadsheet. 

While the largest administrators will connect directly to the dashboards, the rest of the industry must connect via integrated service providers. A couple of these have already been built and appear straightforward. 

There was much debate around the infrastructure before it was built, but now it is nearly finished it would be unproductive to reset now. 

However, I wonder if it would be better for core data to be held centrally and requests only sent out to the administrators who actually administer the relevant schemes.

Everything, everywhere, all at once 

Research conducted among consumers suggested that all the dashboards’ functionality should go live at the same time. 

That is perhaps unsurprising, as any surveyed respondent would indicate a preference to “find” all their pensions, be given a “value” and receive a gold bar in the post – the dashboards will not be offering gold bars – all at the same time.

But is that really what consumers need? Certainly, the complexity of launching them together suggests we needed a phased approach.

We know that engagement increases as savers reach retirement, so launching the find functionality first would deliver immediate value by providing contact details for all an individual’s pensions in one place. This could help to resolve the £26.6bn sitting in unclaimed, dormant and lost pots. 

By applying such a segmented focus, we could have had the dashboards launched and gone live already.

The shape of things to come 

But what should the next phase look like? In the Netherlands, the government’s personal records database allows all pension funds and insurers to share key data. A saver could use this to update their contact details through one dashboard and have this data sent to all their pension providers instantaneously. 

This might help solve one of the single biggest data gaps pension administrators face today.

Then once we have this part working seamlessly, the task of adding the value of DC arrangements will be reasonably straightforward. 

The next phase – adding DB values – will be complex, but the process will be built on a tried-and-tested platform. As these features support the most engaged membership, they should not delay the rest of the project.

Time to focus on the prize

However, we simply do not know what the Department for Work and Pensions intends to do during this hiatus. Industry sources suggest all that is planned is a six-month postponement rather than a pragmatic reset of the programme. This would be a mistake and a missed opportunity. 

The pensions dashboards is a long-term project and we should be using this delay to actively improve the project, plan for early successes, drive engagement and to provide enhanced value to savers.

Girish Menezes is head of administration at Isio, a board director of the Pensions Administration Standards Association, and a member of the Pensions Management Institute’s advisory council