UK, EU pension-tracker incompatibility would be 'short-sighted'
It would be short-sighted for any UK pension tracking service not to work in conjunction with the proposed European tracking service (ETS) unveiled last week, according to the UK’s People’s Pension.
Nick Gannon, pensions management consultant at People’s Pension parent company B&CE, noted that the costs of tracking members if a system were not put in place would be significant.
Speaking at the launch event for the TTYPE project – short for Track and Trace your Pension in Europe – Gannon said it would also be important that tracing services eventually established could step in to provide information to members that schemes currently had to send out, offering potential administrative savings.
“It would be short-sighted for any national tracing service that is developed now not to have some kind of interface capability with a European tracing service,” he said at the launch.
Gannon’s comments came the same day as the UK’s Financial Conduct Authority said it would push ahead with the creation of a Pensions Dashboard, which it said in December would be based on the Dutch website mijnpensioenoverzicht.nl.
He added that, without such an ability to trace workers who had accrued a pot in the UK, only to return home or move to a third country, pension schemes would be left with the cost of tracking down each member come retirement.
“There is a deferred cost aspect there,” Gannon said.
People’s Pension parent company B&CE is a provider of benefits to the construction industry, a sector with a highly mobile and transient workforce.
Gannon joked that, until a better UK member came along, B&CE was likely the consortium’s UK representative.
However, it is understood that the organisation has not yet given a formal commitment to the project.
It joins existing consortium members PKA, PGGM, APG and Mn.
Germany’s SOKA Bau, the pension provider for the construction industry, cited the mobile nature of its workforce as one of the reasons it would also support the second phase of TTYPE to develop a detailed business model for the ETS.
Peter Gramke, head of internal audit at the €4.2bn supplementary scheme, said SOKA would be able to provide a basis for testing the proposed ETS and offer up its expertise in dealing with the “very fragmented” German pensions market, which covers several different funded vehicles, book reserves and private savings options.
“The project team would be able to judge quite early if the ideas and the methods and solutions will prove successful in the end, or what steps have to be taken to make it successful in the end,” he said.