Three quarters of pension schemes (75%) believe they will be ready to join the Pensions Dashboard initiative, provided they are given two years to prepare and overcome challenges, a new survey from the Pensions and Lifetime Savings Association (PLSA) has revealed.
According to the PLSA member survey, 75% of pension schemes – both DC and DB – already have a defined process for matching savers to their pensions entitlements, but admitted there are several challenges associated with accurate matching, particularly where member data is not regularly updated by employers.
Government policy dictates that schemes will have to supply, at most, data available on annual benefits statements to initial dashboards and three quarters (75%) of schemes believe they will be able to make this data available within 24 months.
While the PLSA described the findings as “encouraging”, it warned that the onboarding timeline should not be designed to suit the simplest schemes but be flexible enough to cater for those schemes that might need more time to prepare. Currently, only about half (48%) of DB schemes provide information on the accrued rights of deferred members as part of the annual benefit statement, and according to the PLSA it would take time for these schemes to provide them for the Dashboard.
The industry body added that it was important that the initial Dashboard show an estimated retirement income for individuals’ pension entitlements and include all accrued entitlements and special features such as spouse’s pensions or guaranteed annuity rates so people fully understand their retirement income.
Nigel Peaple, director policy and research, PLSA, said: “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.”
