Margaret Snowdon discusses the importance of the Dashboard and what Administrators can do in preparation.
Dashboard is coming and the timescale for delivery is tight, which means many of us will have to work hard and fast to make it a reality.
2019 seems far away and we have other priorities in the meantime, so it is tempting to put the creative juices for dashboard aside for now, but that would be a mistake.
We certainly need to know considerably more about what dashboard will look like and how it will work, but as a concept it is vital for a number of reasons.
5 years ago, PASA was one of the few voices advocating a virtual aggregation solution to what we saw as information asymmetry in pension savings.
Members find it very difficult to see what pension savings they have and when we tell them, we often take a while and drown them in paper and words.
A dashboard will allow members to see all their benefits instantly in one place and because it needs to be easily viewable, will force us to simplify pensions information.
It will also help to link members and missing pots and might even show some consumers that they have savings they hadn't been aware of. The important thing about a dashboard is that it puts pensions into the public consciousness and will do more to nudge than all our considerable efforts so far.
The industry will step up to the plate to create and deliver dashboard and administrators have a key part to play.
For a dashboard to be useful to members, it needs to be accurate and close to real time.
However, we need to ensure that we don't use quality of data as an excuse to delay implementation.
DC pots will be a natural priority, but given the current proportion of consumers with DB benefits, to get the full advantage of dashboard, DB must be included as soon as practicable.
DB data is known to be less robust, especially for deferred members.
The current focus of cleansing by schemes tends to be on common data, which is important for identifying members, but conditional data will make the difference to the accuracy of the valuation information presented on the dashboard. We therefore need to get DB data sufficiently reliable and for many schemes, this will require a sensible programme of data quality improvement.
There will be costs associated with data cleaning and setting up interfaces.
In reality, cleansing costs should not be greater than would be needed for good management of records over time, but incurred earlier. Standard data specifications and interfaces will need to be built and maintained.
Security of data will be more important than ever. If the dashboard succeeds in increasing member engagement, we could see an increase in transfer activity as individuals seek to consolidate their pots.
This will increase demand for resources, greater automation and faster processing.
The industry should consider creative ways to cost and fund this work, especially for legacy schemes.
Because of cost, some schemes may be reluctant to participate in providing dashboard information, but that would really be a disservice to members and could result on compulsion down the line.
Administrators have an opportunity to raise these challenge with trustees. Start now and we will get there in time.
Written by Margaret Snowdon OBE, Chairman of PASA.
