PDP elves deliver a dashboards consultation for Christmas

But we are now on the cusp of delivering a digital revolution in pensions that will strip back barriers to engagement and make pensions data more accessible to savers across the land.

A lot has been written about what schemes need to do to get dashboard fit and be ready for their staging date.

The largest schemes and providers will be connecting to the dashboards architecture next year, and they will need to ensure they have solutions in place to connect securely, match people with their pensions, and ensure that data quality is of a high enough standard.

This data point will be a key challenge. We all know that the state of legacy data is not what we would like it to be, but even the new auto-enrolment schemes struggle, as their data is only as good as what the employer gives them.

It is important we get this right, not least because the launch of dashboards will shine a light on pensions data quality, potentially manifesting itself in people not being able to find their pensions, or through a surge in possible matches.

It is not too late for schemes to get their house in order to be dashboard fit, but there will be more onus than ever on schemes and providers to keep data continually up to date and accurate. It will no longer be a one-off exercise.

It’s all about consumer protection

At the beginning of December, we saw the publication of two essential pieces of the dashboards jigsaw, with consultations from the Financial Conduct Authority and the Pensions Dashboards Programme.

The FCA consultation focuses on the regulatory hoops that providers will need to jump through, and continually meet, to be a qualifying pensions dashboards service.

Dashboard providers will need FCA authorisation and a specific permission to engage in dashboard provision.

The consultation covers handbook rules as to how companies become (and remain) authorised to provide dashboards, how companies undertake this activity, and rules on ancillary services connected to dashboard provision – all designed to ensure strong levels of consumer protection.

And while pensions dashboards can be a force for good, we are all too aware that it is far too easy to confuse, mislead or indeed scam people when it comes to pensions. That is why the PDP consultation on design standards is so integral to the success (or otherwise) of the dashboards programme.

The importance of user testing

One concern that I have heard voiced is that user testing has been light so far. We need to better understand how members will respond to dashboards. It will be interesting to see how potential qualifying pensions dashboard services tackle this on their journey to authorisation.

In my view, these two consultations are the most important of the programme as they will determine how information is presented, what must, can, and should not be done. It is the manifestation of the dashboards in the eyes of the consumer as we get closer to the launch of the first pensions dashboards.

Quite rightly, the PDP wants dashboards to be informative and engaging. Sending people to a boring, text-heavy website will simply put some (most) people off. But there is a balance to be struck between how that information is presented and consumer protection.

The PDP’s approach is for the design standards to set out a framework, with the emphasis on the qualifying pensions dashboard services to carry out user research and testing, to ensure it meets the requirements of the dashboards user and the standards set out in the framework.

To my mind this strikes a nice balance between adherence to the standards and allowing space for innovation.

The requirement that qualifying pensions dashboard services are accessible and inclusive, by design, is also crucial to ensure all members can get the best possible user experience.

Importantly in this version of the pensions dashboards, interaction is on a read-only basis. Dashboards are not allowed to make calculations and cannot have transactional functionality.

This might change in the future, but better to launch, test and develop rather than rush into fully transactional dashboards from day one.

There is the potential for companies to innovate and offer what the FCA calls “post-view” services to assist scheme members in, for example, retirement planning.

These will need careful policing to ensure that the high standards associated with dashboards are maintained, and that post-view services support savers and do not drive the wrong decision-making.

Importantly, because qualifying pensions dashboard services need FCA authorisation, the new consumer duty regime will apply and need to be embedded in how dashboard providers operate. We need this to have teeth.

We are now full steam ahead with the development and delivery of pensions dashboards. They will change the way in which savers engage with their pensions for the better.

The recent consultations are an important part of the jigsaw, and we are now a big step closer to dashboards being alive and operational.

Darren Philp is founder of Shula PR and Policy