Majority of employers oppose multiple pensions dashboards

The majority (82 per cent) of employers are opposed to multiple dashboards and dashboards that do not include state pensions, research from the Association of Consulting Actuaries (ACA) has revealed.

It also found that less than half of employers have cleaned their data in readiness for pensions dashboards.

The ACA's survey revealed "strong support" for elements of the Pension Schemes Bill, although a quarter of employers remain opposed to the regulator's direction of travel.

In particular, the research found that the majority (72 per cent) of employers support The Pension Regulator's (TPR's) proposed fast track and bespoke compliance proposals for defined benefit (DB) pension schemes.

Commenting on the findings, ACA chair, Patrick Bloomfield, stated that whilst there is "strong support" for the pension dashboard, there are warning signs about what is expected and when.

He continued: "The government and TPR should be encouraged by the broad support for the new DB funding code.

"But with one in four employers being against the direction of travel, work is needed to resolve the challenges for schemes still open to new members and making the new framework fit for a post-Covid world.”

Bloomfield emphasised that the pension dashboards has the potential to help employees understand their pensions, stating that this is really important given most employers do not provide their employees with access to financial advice.

Indeed, the research found that just 45 per cent of employers provide access to independent financial advice close to retirement, despite 39 per cent also stating that members have experienced difficulty in finding advice on DB transfers.

“Curiously, the Commons recently voted down making it compulsory to direct employees to Pensions Wise, which flies in the face of what the public needs," he added.

The research also found that two-thirds (65 per cent) of employers view consolidation as a good thing, compared to 39 per cent in 2019.

ACA pension schemes committee chair, Peter Williams, explained that the "quite rapid advance" in support of DB consolidation likely reflects mounting concerns at some employers over the future in both economic and regulatory terms.

“It’s a shame the Pension Schemes Bill did not incorporate consolidation measures to back up the recent guidance from the regulator but we are encouraged by the suggestion that another Pensions Bill will take this forward in the near future," he added.

It also found that 52 per cent of employers would support collective defined contribution (CDC) being made available to employers other than Royal Mail, with half also supporting a CDC master trust option.

However, in practice, just 12 per cent would consider introducing such a scheme, with 58 per cent expressing concerns that CDC would be hard to communicate.

Williams highlighted the growth in support for CDC as encouraging, clarifying however, that it is important that this advances over times to suit other CDC designs.

“The regulations must also open up to support multi-employer CDC schemes, and there is welcomed support for master trust CDC solutions," he added.

The research is the second in a series of reports outlining the findings of the ACA’s 2020 Pension Trends Survey, and aimed to consider employers attitudes towards the Pension Schemes Bill.

Further findings relating to the climate related amendments of the bill are expected to be published in the future, after the first report revealed "huge support" for pension tax reforms.

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