The government should deliver a single pension dashboard and make the provision of data by providers compulsory, the Work and Pensions Committee has argued.
According to the Pension freedoms report published today, the Work and Pensions Committee has argued that a single, all-inclusive platform and the compulsory provision of information is necessary to deliver the pension dashboard in April 2019.
The Committee has recommended that a single dashboard should be introduced by the government and hosted by the forthcoming single financial guidance body. To deliver this, it could be funded by the industry levy, the report added.
Looking at the current plans, the Committee has argued in its report that there is a stronger case for a single platform and that multiple dashboards may be less convincing for untrusting consumers.
It notes: “The case for a publicly-hosted pensions dashboard is clear cut. Consumers want simple, impartial and trustworthy information. The case for multiple dashboards hosted by self-interested providers is far less convincing. This would add complexity to a problem crying out for simplicity.”
With this, it has been suggested that the regulation of a single dashboard would be easier to maintain, rather than ensuring that multiple dashboards are consistent with one another and not embark in damaging competition.
“The pension dashboard was conceived as a means of empowering consumers to promote competition in the product market. There is a risk that, in a multiple dashboard system, providers could instead compete on the information provided,” the report stated.
Furthermore, to deliver a fully functional dashboard on time, compulsory provision of
information has been supported.
While this has been widely discussed and called for by the industry in the development of the platform, the Work and Pensions Committee has also recommended that the government mandates all pension providers to provide the necessary information to the dashboard.
The Committee noted that this suggestion has been supported by the Pension and Lifetime Savings Association, Royal London, Which? and The Pensions Regulator. The Pensions Minister, Guy Opperman, also said in December 2017 that there is “growing evidence for some form of compulsion to bring about a complete dashboard in a reasonable timeframe.”
Although this is considered achievable for many defined contribution schemes and large defined benefit schemes, there are concerns that some smaller legacy DB schemes may struggle to provide the required information in a digital format.
To overcome this, however, the Work and Pensions Committee has suggested that the government and the regulator devises a phased approach to information provision.
“To enable smaller legacy DB schemes sufficient time to comply, we recommend that government consult with TPR on an implementation timetable. This should ensure that at least 80 per cent of all DB pensions are visible on the dashboard by April 2019, with the remainder to follow,” the Committee concluded.