As the deadline for submissions to the Department for Work and Pensions’ (DWP) consultation on the draft Pensions Dashboards Regulations 2022 approaches – Sunday 13 March – the Society of Pension Professionals (SPP) has called for clarity over responsibility and liability relating to dashboard activities.
“The Society of Pension Professionals remains very supportive of the pensions dashboard. This consultation covered a number of key areas in a welcome and important step,” said Paul McGlone, former president of the SPP.
“Inevitably there will be areas where further clarity or progress is needed, and today we have highlighted precisely where in the latest regulations improvements are required,” he added.
The Society stated that dashboards are an ambitious project, with many new requirements on schemes and providers, and information presented in a completely new way.
There remains concern in the industry about what happens if savers take actions or decisions based on information that, despite reasonable care, turns out to be incorrect or misunderstood. Without clarity on this issue, each stakeholder will need to comply with regulations in a way that minimises their own risk, which may not lead to the best overall experience for savers.
“Clarifying issues around liability, design standards and enforcement is now essential,” McGlone said, adding that SPP will continue to work closely with the Pensions Dashboards Programme, the DWP and others in the pensions industry, to deliver this clarity and “ultimately the successful rollout of the dashboards project”.
Clearer decision-making
The Pensions and Lifetime Savings Association (PLSA) has long been a supporter of the pensions dashboards, but believes, alongside its Retirement Living Standards, it could play a fuller role in supporting effective decision-making by savers.
The staging timeline sets out when schemes should connect to the pensions dashboards architecture, but the key to the success of the project will be ensuring they are useful and understandable by savers at public launch, the association stated.
In its submission to the DWP consultation, the PLSA has set out three threshold tests that would need to be met before the public launch of dashboards.
Nigel Peaple, PLSA’s director of policy and advocacy, said: “Dashboards will only be a success with the public if they meet three tests on coverage, accurate data matches, and user understanding. In particular, extensive user testing will be needed to reach agreed quality thresholds so that savers are not immediately disappointed by a lack of information, or worse, suffer detriment as a result of making the wrong decisions due to dashboards not being designed correctly.”
The PLSA estimates the testing period to meet these thresholds could take 12-18 months, after the first cohort of schemes have connected to pensions dashboards in the spring of 2023, but it may take longer.
‘Dumb dashboards’
Consultancy LCP has warned that the current proposals could end up creating ‘dumb dashboards’ of limited initial use to consumers who will then need to – or be enticed to – go elsewhere to use the information provided.
Under current plans, all dashboard providers will be required to present member data in a standardised way with strict restrictions on ‘manipulating’ the basic data or presenting the data in a different way.
Depending on the final design standards, this could inhibit ‘added value’ services such as modelling the impact on retirement income of extra contributions or working for longer.
However, it is envisaged that users will be able to ‘export’ their data so that it can be used on other sites.
LCP has warned that this extremely cautious approach could simply result in users taking their data to somewhere much less regulated where the risk of scams or poor decisions would be increased.
Steve Webb, partner at LCP, said: “The desire to protect consumers is understandable, but if this results in ‘dumb dashboards’ then this could do more harm than good. Simply seeing all your pensions in one place is the start of a journey not the end.”
He added: “If dashboards themselves are severely restricted in the support and services they can offer, consumers will simply take their data elsewhere, almost certainly to a less regulated environment. The best antidote to scammers and poor choices is to provide more help.”
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