As you may know the DWP issued their response to their own Pensions Dashboard consultation this month. The headlines and accompanying text paints a similar picture to before. But once you really get stuck into the details there are some subtle but quite interesting changes in some areas.
Let’s cover the obvious things first. There will be Pensions Dashboards, it’ll be mandatory for providers to allow access to their data, and the DWP will put some of the money earmarked in the last Budget into getting the project up and running. The Single Financial Guidance Body (SFGB) or Money and Pension Service (MAPS) as it’s now known, will run the project and appoint a chair who will report into the MAPS board and ultimately the DWP.
All this we knew or fully expected. But the paper does indicate some other changes.
A phased approach
There will be now be a pilot phase which will decide what data customers really need to see. Rather than ask product providers what data they think customers want to see (and what they want to show them), it’s right to ask customers directly
The paper suggests ‘big DC schemes’ go first – but what does this really mean? A ‘big DC scheme’ may mean something very different to my pension technical colleagues than what the rest of us think it means. What they really mean is large master trusts and GPPs used for auto enrolment. But it would be better to make that crystal clear, especially in law.
Protecting customer data
The real change, as I see it, is in what Dashboard providers will be able to do with customer data. It’s no great secret that some parts of Government have been worried about what multiple Dashboards may mean, especially with the more commercial offerings that have been discussed. Some have pitched for there to be only one Dashboard run by Government and restricting it to providing a simple information only service. The most recent paper shows that the DWP have listened to some of these concerns.
For example the proposal is now that Dashboard providers can’t store or even see the data shown on their websites. Whilst there's mention of ‘porting’, this seems to inhibit the models proposed whereby a Dashboard provider would then use the data in their tools, offer advice or even provide a ‘consolidate your pots’ button. I think in particular, the last of these is what’s making the DWP pause for thought.
Once you look, this concern is noted throughout the paper and results in several small changes. Data will be basic to start with, based on statutory money purchase illustrations (SMPI), with the possibility to add more data later if MAPS think it’s appropriate for the customer. What Dashboard providers can display will be heavily monitored and only currently regulated businesses will be able to host a Dashboard at the start. So those fintech start-ups will have to wait a while. Although what type of regulated business they mean is rather unclear. Is it only pension firms and advisers? Does this include banks? Mortgage providers?
The most startling quote of all is buried in the technical architecture section:
‘Allowing for multiple dashboards in this initial phase is made acceptable to the department by maximising the security and privacy of users through our proposed architecture.’
This doesn’t strike you as the words of a department that’s enthusiastic about the benefits of the multi-Dashboard approach.
Whilst there is a lot of detail to be worked out by DWP, MAPS and the industry, and we’ll be right in there working for our members’ and advisers’ best interests, there does seem to be a shift here.
MAPS view of Dashboards is that while there will be more than one, they should be closely controlled at the start and they’ll only loosen the reins if they’re convinced it’s in the customers’ best interests. This shows a shift from the previous ‘regulate after the fact’ approach, which is understandable.
What’s not clear is if it’s actually best for the customer. By limiting bad outcomes from some of the more aggressive business models, will they reduce the overall positive impact of letting people access their pension data in one place?
Time will tell.