Various responses to the UK’s Pensions Dashboards Programme’s (PDP) latest call for input which closes today, have highlighted the fact that ‘value’ data – estimated retirement income (ERI) – could pose a threat to the programme’s implementation and success.

Under the plans set out in the PDP’s Call for input on staging, pension schemes will be required to supply full data on members in waves, starting with master trusts, large group personal pensions run by insurers and large defined benefit (DB) schemes.

According to consultancy LCP, schemes will have to be ready to supply not just details of membership but also ERI for each member.

“This is likely to be a huge job for some schemes, particularly those DB schemes who do not routinely even calculate estimated retirement incomes for deferred members,” the firm said.

LCP partner Steve Webb said: “It is great that we are now starting to see some of the detail about how dashboards are going to work. But the determination to go live with estimated retirement incomes as well as memberships could actually delay the launch.”

He said that re-uniting people with lost pensions is a huge potential positive from dashboards and this shouldn’t be delayed any longer.

Sir Steve Webb

Sir Steve Webb

“We also need to recognise that when people see the data on dashboards they will have dozens of questions and presenting them with value data will greatly increase the pressure on schemes and employers to have the capacity to handle them. A phased approach to accessing the dashboard would also be a good idea,” Webb suggested.

Paul McGlone, former president of the Society of Pensions Professionals, said: “We remain very supportive of the Pensions Dashboard, and it’s extremely helpful that the timescales for delivery are becoming increasingly clear.

“However, we share concerns from across the industry that there are many areas that remain unknown, which will hamper progress. The issue of estimated retirement income is particularly complex and must be resolved in good time if the implementation of the Dashboard is to be a success.”

Dashboard functionality

Karl Lidgley, client manager third party administration at Hymans Robertson, agreed that there could be a potential delay rolling out the PDP also due to the fact that “a vast number of pension plans are lost or unclaimed” and this would play a vital factor in the timing of the stages for the programme’s rollout.

“This orphaned pension problem is only going to increase due to a rise in job changing, particularly as a result of the coronavirus pandemic, making it an even more urgent issue,” he said, adding that the initial dashboard should focus, on the ‘find’ function for consumers with the ‘view’ functionality to be developed later.

“A simple ‘find’ service will allow consumers to identify their pension providers and put them into contact with the administrators. This could be rolled out in the timeframes outlined in the call for input and allow the industry time to develop a standard approach to reporting the ERI required for the full ‘view’ functionality,” Lidgley explained.

LCP agrees that even smaller schemes can reasonably be expected to provide lists of their members, which means that wider coverage can be achieved earlier by going for a ‘find’ service first.

The pensions dashboards, which will allow consumers to see their pensions in one secure place online, will be staged over three waves (large, medium and small pension schemes) starting from April 2023.

The first wave (large schemes) will run for up to two years and the second will start once the first is concluded.

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