Three quarters of DC and DB pension schemes believe they will be ready to join the pensions dashboards initiative provided they have two years to prepare, a Pensions and Lifetime Savings Association (PLSA) survey has found.
A PLSA member survey has found that 75 per cent of schemes already have a defined process for matching savers to their pension entitlements, but say challenges associated with accurate matching remain, particularly where member data is not regularly updated by employers. Key problems include incorrect key identifiers, such as surname, which can hinder the matching process.
Government policy is that schemes will have to supply, at most, data available on annual benefits statements, or on request, to initial dashboards. The research found 75 per cent of schemes stated that they should be able to make this data available within 24 months.
Just 48 per cent of DB schemes currently provide information on the accrued rights of deferred members as part of the annual benefit statement, which is not a legal obligation, so a requirement to provide them for the dashboard will take some time to address.
The PLSA says it is important for initial dashboard to show an estimated retirement income for individuals’ pension entitlements to ensure that savers are able to view data about their entitlements that is consistent and comparable. It argues that dashboards should include all accrued entitlements and special features such as spouse’s pensions or guaranteed annuity rates, so users can fully understand their retirement income.
PLSA director, policy and research Nigel Peaple, who is a member of the Pension Dashboard Prototype Project Steering Group, says: “We have long been a strong supporter of the pensions dashboard and believe it is key to helping improve saver engagement with their pensions and helping them plan their retirement income.
“Our survey shows pension schemes are already well-placed to become an active part of future pensions dashboards. The progress schemes have made in addressing the data challenges they face is highly encouraging, particularly given current circumstances. That said, we should not pretend that real challenges do not remain and we need to give the industry time to ensure data is complete and accurate.
“The pension dashboard should connect people with all their pensions. We have concerns that launching with too few participating schemes will provide savers with an incomplete picture of their pension entitlements and present very real risks to users. Initial dashboards should show – at launch – all or very nearly all the benefits members have accrued or the project may fall at the starter’s pistol.”