Pensions Dashboard Update: Should You Be Planning For Its Introduction In 2019?
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Pensions Dashboard Update: Should You Be Planning For Its Introduction In 2019?

28 June 2018

This article by Chris Connelly, Solutions and Propositions Director for EQ Paymaster, first appeared on reba.global on 28 June 2018.

Employers should indeed be planning for the dashboard’s introduction; perhaps not as soon as the original April 2019 target, but plans need to be in place. That said, many – if not all – could be forgiven for scratching their heads at present and wondering what on earth that entails.

Thankfully help is at hand in the shape of a guide for pension scheme trustees. This is being developed by the Pensions Administration Standards Association (PASA), as part of its Dashboard Working Group, in association with the Department for Work & Pensions (DWP).

PASA was asked to work alongside government to help draft guidance for schemes to be ‘dashboard ready’ and to determine the way those schemes’ needs should be represented in the data standards and dashboard governance.

Its guide will be issued to coincide with the government’s feasibility study on the pension dashboard, the publication of which was originally planned for April of this year, but is at the time of writing, delayed until the summer.

The delay has raised speculation in the press around whether the April 2019 deadline to have the project up and running is now feasible. This target was signalled in the 2016 Budget when the plans for the dashboard were first announced.

What we do know for sure is that everyone – government and industry – are determined to get this right. Inertia still rules in pensions and providers and advisers alike worry that a dashboard without full involvement from all pension schemes, would undermine its value. 

The traditional lack of engagement between members and schemes is a major issue, not just for government but also for UK companies, yet demand seems to be there: 72% of working adults would welcome the ability to see all of their pensions in one place, according to the People’s Pensions Survey.

What is the pensions dashboard?

It’s probably more accurate to ask what dashboards ARE? Because the initial proposal from the Pension Dashboard project is that there will actually be many: giving savers the choice of looking at their benefits online through the dashboard provider of their choosing.

That said, since the last election, ownership of the project moved from Treasury to DWP, who then initiated an industry-wide study to assess the feasibility of the project delivering. One of the more public debates in that study has been to draw into question whether there should instead be a central dashboard.

Dashboards will be secure and online platforms that will enable savers to find and view all their retirement pots in one place at the same time, giving individuals a greater awareness of their assets and enabling them to plan better for retirement. They offer the scope to pull together all pension pots from Defined Benefit (DB), Defined Contribution (DC) and even future state pension entitlement to help people build a whole picture.

In spite of greater numbers now having a workplace pension thanks to auto-enrolment, many still aren’t saving enough or getting the support they need to make the most of their money on retirement. Plus more opt-outs are expected as minimum contributions increase.

It is anticipated that raising awareness of pension pots and their values will help savers plan better for later life and perhaps recognise sooner, that just being in a scheme is not necessarily enough to provide for a comfortable retirement.

What’s in it for employers?

It would be understandable to think that employers are largely redundant in the dashboard equation. Discussions around the scope and build of dashboards have so far centred on government and providers. Employers might see themselves as simply a conduit of information about their future availability and use.

However, being part of a dashboard could offer to employers and employees so much more than simply a pension finder service. Although very useful, this won’t be enough to improve outcomes.

The scope of dashboards could actually be much wider in terms of incorporating attractive and engaging tools - different tools and messages for different life stages - to encourage employees to take a more active role in planning their retirement savings.

This not only brings advantages to employees, but also has a knock on effect on their employer.

We know that when employees understand the benefits provided by their employer they appreciate them more, and this contributes to their productivity and goodwill, which can have a positive impact on the company’s bottom line.

Additionally, with an ageing population, some employers are concerned that they will not necessarily have the right job roles for older workers, especially those who might not be able to afford to retire. Having strong engagement and employee ownership of saving for retirement will help those future demographic challenges.

Don’t wait to be told

Whilst mandatory take-up of the dashboard is unlikely to come initially (mostly because there is little legislative bandwidth to deal with anything other than Brexit), it is worth planning to be dashboard ready now.

The most obvious downside is the perceived work involved. But, then again, those schemes that aren’t on the dashboard may find that they face additional work anyway once dashboards are up and running because member interest has increased. 

DB schemes in particular are likely to need the most work with regards to preparing their data for the dashboard as, unlike newer DC schemes, they don’t tend to have as much online presence. Additionally, the data required for the dashboard is going to include benefit values, so it will not just be static data that will need to be available in a timely fashion, but calculated data too.

That initial lack of compulsion shouldn’t be used as an excuse to do nothing. The introduction of a dashboard doesn’t represent the only reason to clean up pension scheme data: it’s the right thing to do, because employers need to be administering and paying pensions correctly.

Indeed, the dashboard will ask nothing more of a firm than any member can ask directly already. It’s just that the volumes are likely to increase. Origo believes that 15 million savers are likely to engage through pension dashboards and are scaling their technology accordingly. 

A question of engagement

Furthermore, the increasing onus on employers to improve pension communications and member engagement in line with changing workforce demographics, means that investigating the right technological solutions makes sense now. 

There are solutions available that incorporate first party, third party and open source data to unlock insights that explain employee behaviours, thereby allowing for trigger-based and bespoke communication strategies.

This kind of technology can not only be incorporated into a dashboard but also into your own pension communications. This can provide a powerful means of helping to quell the kind of economic insecurity that seems to have become the new norm in the UK. After all, once your members have found their pension with you, what are you going to do next?

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