The pension dashboard fiasco continues to roll on. The scope seems to be continually cut so something can be delivered in line with the latest “timeline“. Apparently, we might get something up and running by 2023. It appears the government and especially the Money and Pension Service are desperate to bury the fact the original service was promised to go live in 2019.
After the US and China, the UK has the third most successful fintech sector in the world, yet the craven self-interest of the fat cat DB pension scheme trustee community is being allowed to turn a project which, had it hit the original timelines, could have been world leading, into something that looks destined to be a national embarrassment.
Successive governments have a dire track record of major IT projects delivering late and over budget. This is of course very profitable for the global IT providers who managed to bag these contracts. While the initial Money and Pension Service dashboard is being cleverly constructed to make it look like a private sector service, the reality is quite different. From a cost perspective it is a public sector IT project wolf, dressed up in fintech and private sector sheep’s clothing.
This white elephant will be a huge drain on industry resources. Costs, which will ultimately be paid by consumers, will doubtless persist for many years, until it is ignominiously scrapped. All of this is entirely avoidable.
The moans and groans from the arrogant, incompetent, and underqualified defined benefit pension trustee community seem never-ending. The latest whine is that DB schemes will need to be able to deliver fund information and transfers on a real-time basis. If you are still running your organisation using an abacus and parchment, as many DB schemes clearly are, this may be a problem, but in the 21st-century the technology exists to provide exactly this information in seconds, whenever it is needed. Perhaps trustees should spend less money on their own remuneration and benefits and more on technology to support their members?
Far too many trust-based schemes behave as if they are immune from their GDPR obligations to provide information they store electronically, to customers in an easily readable digital format. It is essential that they are not allowed to ignore the pension dashboard with similar contempt. This begs the question, how many of the trustees The Pension Regulator allows to run schemes would meet FCA standards for senior persons?
I believe there are four steps that could rescue this project. First, the Competition and Markets Authority should be given overall control. The CMA delivered Open Banking on time against aggressive timescale in difficult circumstances. It has a proven track record of making these things happen, why not engage their expertise?
Second, the Treasury should conduct an urgent review to identify if the current plan to deliver a single MPS dashboard before any other, will really deliver best value to citizens. This should consider the long-term cost of running such a service, even if it will be paid for by the “industry“. In addition, such a review should consider if the FCA plans for Open Finance represent a better way to deliver the very real benefits of the pension dashboard type services. Does it make sense to have two very similar projects running in parallel through different government agencies?
The FCA is globally respected as an innovative fintech regulator. To me it seems far better equipped to provide the right governance structure for this important work, especially if backed by the CMA.
Third, the Pension Regulator should require all schemes to produce a three-year financial plan showing how they will meet all their pension dashboard obligations within their economic resources. Schemes that cannot clearly demonstrate the economic resources to deliver should be required to merge with larger schemes. Finally, the Pensions Regulator should require all pension trustees to meet the same standards, responsibilities and liabilities as the FCA senior persons regime.
After a great start in 2016, the Pension Dashboard project has since consistently failed to deliver. Action now can stop the current fiasco becoming a long-term disaster. The benefits are as valuable as they ever were – it’s the execution that needs fixing not the concept.
