‘Force pension schemes to send data to dashboard’

The government is being urged to force retirement schemes to supply data about its members to a new digital “Pensions Dashboard” as the industry concedes some will not do so voluntarily.

The call was made by Margaret Snowdon, a member of a Treasury steering group overseeing the development of the Pensions Dashboard, an online tool which will for the first time allow UK savers to see all their retirement funds in one place.

Rather than forcing pension providers and schemes to hand over their data to the dashboard, the government has said the industry can develop the project on a voluntary basis, but it has threatened to compel participation if needed.

While many large pension providers have signed up to the groundbreaking project, concerns have grown that some “defined benefit” pension schemes, with millions of members, may be unwilling to hand over their data.

“Defined benefit pensions are where there is most resistance and reluctance,” said Ms Snowdon, who is also chair of The Pensions Administration Standards Association, an independent body whose members look after the pensions of around 11m savers and pensioners.

“Unlike newer defined contribution schemes, defined benefit schemes do not have much online presence, so there is more work for them to prepare their data for the dashboard and they are put off by the cost and effort.

“I think the last man to come in will be compelled to come in, rather than come in voluntarily.”

Ms Snowdon says the government should prepare now to force those unwilling to sign up to the dashboard by 2021, two years after its official launch date.

She said she would be willing to do a deal under which all schemes signed up by 2021, even if they were not participating when the dashboard was launched in 2019. “But the government needs to act now to prepare the ground for compulsion in 2021, as it would be rather foolish to wait until 2019 to then say we need to get started.”

The Association of British Insurers, which represents pension providers, said compulsion was “inevitable”.

“The long-term savings industry is showing great commitment to the Pensions Dashboard and is making impressive progress with a prototype,” said Yvonne Braun, the ABI’s director of long-term savings and protection policy.

“However, it remains likely that the voluntary approach will only get us so far and we believe legislation will almost certainly be needed further down the line to ensure the dashboard is as useful as possible to the greatest number of people, including members of trust-based schemes.”

In response, the Treasury said 17 of the largest pension providers were already working together voluntarily to build a dashboard prototype by March 2017.

“We want to see the rest of the industry join them for the next phase of the project and have been clear that if this doesn’t happen, we may legislate to ensure no one misses out on seeing information on all their pension pots in one place,” said the Treasury.

As an interim measure, Ms Snowdon said she had also asked the Treasury to offer tax breaks to pension scheme administrators, in the form of VAT relief on dashboard related work, to encourage them to “rush forward”.

But others in the industry urged the government to focus on compulsion.

“It shouldn’t be about asking nicely or persuading,” said Sir Steve Webb, policy director with the insurer Royal London and the former pensions minister.

“There should have been compulsion from day one. The sooner the government does this, the sooner the industry can start planning [around a date to comply].”