The pensions industry is often criticised for how long it takes for meaningful data to be made available to members, employers and trustees. Compared to the wealth of information available via Open Banking, the lack of progress by the pensions industry is truly shameful. The biggest barrier to the delivery of pensions dashboards is the deliberate delays and obfuscation of countless DB schemes and other trustees.
Back in 2016 when the Treasury was leading the pension dashboard project these organisations were saying it would take four years to get their data in order, yet as we approach 2020 the same actors are pleading for another four years. The truth is large numbers of scheme trustees are deliberately neglecting their members’ interests, preferring their own personal interests. If most pension trustees were tested to the same standard as the FCA SM&CR regime, most would be sacked immediately – reform can’t come to this sector fast enough.
Legal & General recently demonstrated why most members of the public would be far better off in a scheme operated by a professional pensions provider. It has created a cloud-based portal which delivers information to a browser-based dashboard available to schemes, trustees, employee benefit consultants and corporate advisers.
This provides an impressive wealth of data to enable them to understand far more about how their scheme works, identify variations and inconsistencies that may exist and better target member communications to drive up adoption and optimise the value to schemes and members. This is a significant advance from traditional management information type systems which deliver to a business information enabling real insights, in future to enable predictive analytics through the use of artificial intelligence and machine learning so that organisations take decisions about how and where to deploy resources. While information is delivered in a deeply granular way for individual schemes for service, actually the data is available for all of Legal & General’s 3.4 million bundled DC pension savers. It can specifically conduct detailed analysis of all schemes since auto enrolment.
A genuinely vast array of data can be accessed via the portal. Variations can be identified in scheme adoption in different geographical locations, employee roles, actions by members approaching retirement, opt outs, adoption of employer matching contributions, the spread of assets invested, adherence to service level agreements, and impact of different member communications via various channels.
In addition schemes or advisers can add their own proprietary data to the service enabling even more sophisticated analysis. Such data is ring fenced from the rest of the service and kept totally confidential. Providing such services to inform better decisions is an enormously valuable benefit and a great example of why pension providers who are supporting millions of members are far better placed than those with only a few tens of thousands of members to deliver better outcomes for employers and members.
I always try to find something flawed in any new service, and although the demo was a bit slow because it was in a pre-production environment, which by the way is entirely normal, so far I can’t find anything in this portal not to like. The service is currently in beta with nine customers and will shortly be extended to a wider group before going live to all Legal & General bundled DC customers early in 2020.
An additional benefit from creating this cloud- based service is that it can be reused by Legal & General to support pension dashboard and Open Finance services. Just because the Money & Pensions service project looks daily more doomed to failure, that does not mean the industry can’t make dashboard type services ready for consumers in the near future. Many advisertech companies are well placed to support such services for advisers. Based on my understanding of their capabilities the obvious firms to talk to would include Focus Solutions, Intelliflo, Iress, Moneyinfo, Plum and Sprint Enterprise.
Legal & General must be applauded for both delivering real innovation in helping organisations make better informed decisions and actually taking action to be ready to support Open Finance services given the inevitable failure of the Money & Pensions Service initiative. This is in stark contrast to so many trust-based schemes that are doing all they can to kick the can down the road and keep their members in the dark.