The pensions dashboard is only a matter of weeks from its prototype launch date, but concern has been raised that this will not be anywhere near the demonstration of a working early version some are expecting.
While a coalition of the willing is pushing forward with the plan to deliver the project by 2019, there is a clear sense everyone in the industry needs to get behind the scheme, and at this point that might require legislation from government.
According to the Association of British Insurers (ABI), this legislation needs to happen sooner rather than later.
The idea of the pensions dashboard is relatively simple: it will be a digital interface on which people can see all their pensions in one place.
Since it was announced by former chancellor George Osborne at the 2016 Budget, 17 firms have signed up to the project group, which is helping with the development of the dashboard, and paying a fee of £50,000 to the ABI (the project managers) for the privilege.
The project group feeds into the steering group, which is charged with making high-level decisions and reporting on its development to the Treasury.
The next stage in the progress is the delivery of a prototype, which is due to go live in March, and this will provide us with the first glimpses of how the dashboard will work.
One pensions industry figure, who did not wish to be named, is concerned the prototype dashboard may not meet everyone’s expectations.
‘There will be something delivered by March,’ he said.
‘There might be some challenge in defining what a prototype is. A couple of people have spoken to me and thought that with the prototype, any customer can go and have a play. But a prototype in any system doesn’t necessarily mean that, it means a functioning way of moving data backwards and forwards. So there will be something there, but I guess it depends on what people read into the word “prototype”.’
We asked the ABI’s director of long-term saving, Yvonne Braun (pictured above), who is heavily involved with the project, whether observers would be disappointed with the progress of the prototype. Braun said it would depend on what people thought the word ‘dashboard’ actually meant.
‘When most people think of the pensions dashboard, they think of the user interface,’ she said. ‘But this project is not about showing the fantastic things you might be able to do with the pension information; this is about showing that it can be done. There will be a basic dashboard absolutely, but the whole point is that fintech companies can experiment with the front end [later on].
‘The prototype is never the full picture; a prototype is a first cut of what this might look like and basically demonstrating end-to-end how it will work. This is about the back-end planning, not the fancy things you could do with the user interface. But it will deliver up to the aims it was set, which will show the interface can work. I am very confident of that.’
If some believe the prototype will be able to show a real person’s pensions at this point, they will be disappointed. Braun confirmed the demonstration dashboard would only use representative test data, which includes dummy data, and not real people’s pension details.
With only weeks before its showcase, Braun is adamant the prototype will be delivered on time.
‘We are on track and there isn’t going to be any delay to it at this point,’ she said.
Time to legislate
The fear with the dashboard is that while the ABI is pushing hard for it, and a number of insurers have put money and effort into getting it going, the project will be hindered by the foot-dragging of closed-book providers and defined benefit (DB) schemes that have no real incentive to get involved with it.
Another worry is that, if not all people’s pensions are available on the dashboard, this will lead to consumer confusion and will not address the issue of ‘forgotten pots’.
This was an issue raised by Daniel Harrison (pictured above), senior partner at True Potential.
‘The pensions dashboard is an excellent idea and a very noble project, which is why we have supported it from the outset. But life companies are not known for their agility and willingness to work to one agenda,’ he said.
‘Having already built a pension dashboard in less than 12 months, we know it can be done but it will be a huge challenge to get the pension companies, the public sector, occupational DB and DC schemes all singing from one dashboard by 2019.’
Hurdles to jump
Given the 17 firms on the dashboard project group are largely competitors and will all want their say on how the project develops, there is understandable concern that cooperation will be difficult to come by.
However Philip Brown, head of policy at LV=, a pension provider that sits on the ABI’s dashboard project group, said that so far all the stakeholders had managed to work together just fine.
‘[Working together] is not a complicated thing to do,’ he said. ‘In this project it is broken down into a couple of subprojects and you have groups of people working on specific issues – for example one is working on electronic identity verification. So you are working with smaller groups, which means progress is made and it is definitely moving along.’
However, Brown agreed that blending in occupational schemes will be the real difficulty.
‘From memory there are over 6,000 occupational pension schemes and not all of them are electronic; I think 1,000 are administered on paper. So that will be the real challenge at some stage to get all the occupational schemes visible. That is where we are going to require legislation to make people do it.’
The need to legislate is not lost on the ABI; Braun said this should happen sooner rather than later.
‘We need to think through what the legislation will entail,’ she said. ‘So far our project has been focused on sorting out the technology, so we are not at that point yet. But we stand ready to help the government with what legislation will be required.’
Call to action
Over the past couple of years the government has made a number of U-turns on major projects (defined ambition, pot follows member and most recently secondary annuities).
Given this record of backtracking on ambitious pension policies it is perhaps easy to see why the government has tried to place the responsibility of the pensions dashboard solely on the industry, and so far no taxpayer money has gone into it.
However given the comments from the ABI that legislation is needed (and soon) it is almost inevitable that the dashboard project will soon be on the government’s hands and not just on the insurers’.
The economic secretary to the Treasury, Simon Kirby, said last year the government would consider using legislation to force providers to contribute to the pension dashboard if they are not forthcoming.
‘If there are difficulties with getting people on board, then we will certainly look at legislation or regulation to make it happen,’ he said.
With the challenges those working on the dashboard are facing now likely to be placed on parliament’s door before long, the question is whether or not this huge IT project can go ahead without any hiccups.