Margaret Snowdon explains how the dashboard can restore trust from members.
Pensions Dashboard is a simple concept. It will provide an easy to read, online picture of a person's pension savings ahead of retirement to help them understand both what it means and what they can do next.
It's not a new idea, but an accessible, digital platform provides the opportunity for people to engage with saving for later life in a less scary way.
Gone will be the reams of paper stuffed with gobbledegook (those can be relegated to background clicking for the curious), replaced by important stuff like 'what pensions do I have and where?', 'how much are they worth now and what will it be in 15 years' and 'what can I do to make up the shortfall?'.
How it looks will be just as important as what it says and we can be sure that Dashboard providers will work very hard to make it appealing, building lots of funky applications to keep us returning.
That's the nice bit.
To get there we have work to do. I keep hearing the doom and gloom merchants talking about how DB can't possibly be expected to take part. 'It's too hard'. 'The legacy data is too poor and will cost too much to put right'.
They're half right.
There are problems with DB legacy data. We've been saying so for years and administrators have been trying to get schemes to do something about it, but until now there has not been a compelling reason to get scheme records up to date and accurate.
Up until now there have been many more interesting things to buy.
Pensions Dashboard needs DB schemes.
Without them members will only have half of their savings picture. What will members think about us if they see a gap where their DB scheme benefits should be? Will they be sympathetic or will they think we are hiding something from them? Since they already do not trust us, I would not like to be running a member help desk when Dashboard launches if my scheme were not part of it.
So what can we do?
1. We need to understand the extent of the data gap. Work is being done on this by the Dashboard team.
2. We need to ensure we are asking schemes to provide the minimum level of information required for dashboard. PASA is working on a Dashboard Ready data standard to help set out what is needed. Our working group was oversubscribed, such was the interest in getting this right. The standard will be something every single DB scheme should achieve fairly quickly with as little cost as possible.
3. Trustees and sponsors need to see this as a priority and plan to have cleansing work completed in good time to avoid the likely capacity crunch as 2019 approaches.
We are calling for compulsion by 2021 (at least for DB schemes), not because we think trustees won't step up to the plate, but because without some sort of stick, we are likely to drag our feet.
We are asking for a carrot too in the shape of a VAT exemption for dashboard related work, but if it happens it could only be for a limited period to encourage early action.
The Dashboard prototype is progressing well and working groups are beginning to explore governance and how best to demonstrate the prototype. Further challenge sessions will be held over the next couple of months, so if you haven't been involved yet, you should attend a workshop to discuss your ideas.
Dashboard will not solve all pension problems, but it is a good way of using technology to restore trust and reduce some of the time we spend telling members about their benefits.
Written by Margaret Snowdon OBE, Chair of PASA.