LGA calls for mandatory national insurance data in dashboards

The Pensions Dashboards Programme launched its call for input on design standards in July, alongside a broader consultation on standards, specifications and technical requirements.

It followed a much-criticised consultation from the Department for Work and Pensions, to which the industry was given just 90 days to respond. It was also attacked for its proposed timeline for the “dashboards available point”, when dashboards will become accessible to the public, which many industry respondents felt was inappropriate.

The PDP’s own consultation, by contrast, met with largely warm reviews, with the Society of Pensions Professionals in particular saying that “the solutions being proposed largely seem reasonable”. However, the industry body added that until they are tested “using real data and structures, it is not possible to say for certain whether they are the best solution or not”.

The pensions industry relies very heavily on national insurance numbers to help uniquely identify their members. While not everyone has a NINO, the dashboards must surely be designed to obtain that information wherever possible

Sir Steve Webb, LCP

The proposal for user requests to be responded to within two seconds was also criticised, and there were also concerns raised about the the immaturity of the integrated service provider market.

The Pensions and Lifetime Savings Association complained that the proposed reporting requirements, in which the PDP consultation suggested management information and oversight data should be provided daily, were “too onerous”.

NI numbers are important

In its own response to the PDP’s call for input, the LGA raised some concerns of its own, beginning with the proposed 30-day timeframe for connecting to dashboards via a third party, which it said “may be insufficient given the number of public service schemes that use the same software providers”. 

“The [Local Government Pension Scheme] is made up of three locally administered public service pension schemes. The schemes are administered by 86 administering authorities in England and Wales, 11 administering authorities in Scotland, and one administering authority in Northern Ireland,” the LGA explained.

“The software providers to the LGPS are the same providers that also supply the Firefighters’ and Police pension schemes. Therefore, we are concerned that the third-party ISPs will not have the capacity to carry out the steps on behalf of LGPS-administering authorities within the proposed timeframe.”

Of particular concern, however, was the emphasis placed on NI numbers as “find” data — the personal information submitted by users that providers can then use to match the pensions they hold for that member, thereby allowing them to be displayed on the dashboard.

The LGA noted that the PDP’s call for evidence appeared to contain “a discrepancy” as to whether the provision of NI number data was conditional or simply optional.

“The data usage guide confirms that the find data sent to pension providers from the pension finder service, once the user has completed the identity service, will only contain the NINO (ref 1.004) if the user has input it,” the LGA’s response explained. 

“The data usage guide shows this field as optional as opposed to mandatory. However, page 22 of the data standards shows the presence of a NINO in field 1.004 as conditional — it states a NINO must be present unless 1.022 [no NI number] is false.”

The first of these would mean that the NI number is purely optional and not required of the user, while the second would seem to suggest that the provision of NI number data is required unless the user has specified that they do not have an NI number, which option carries the reference number 1.022 in the PDP’s data standards document.

The LGA pointed to the Pensions Administration Standards Association’s data-matching convention guidance, published on December 7 last year, which recommends that ISP’s program their DMCs to match on three core data elements: surname, date of birth and NI number.

“If a NINO is not present, it will cause a problem for the ISPs DMCs and it is likely to result in a ‘maybe’ match, creating a poor experience for the user and unnecessary work for the administrator,” its response explained. 

“We request that the NINO data element 1.004 is conditional and must be present unless a user completes data element 1.022 indicating that they do not have a NINO. We understand not having a NINO is not the same as having one and not inputting it.”

Former pensions minister and LCP partner Sir Steve Webb has been keen to see the provision of NI number data prioritised, not least because the DWP would be unlikely to release state pension data without it, potentially resulting in the state pension not showing up on dashboards.

He told Pensions Expert: “The pensions industry relies very heavily on national insurance numbers to help uniquely identify their members. While not everyone has a NINO, the dashboards must surely be designed to obtain that information wherever possible.  

“I would therefore support a dashboard design which expects a NINO and only allows people to proceed without a NINO in the case where they actively indicate that they do not have one.”

ERI requirements ‘do not work’ for the LGPS

The LGA also took issue with the application of estimated retirement income provisions to the LGPS, pointing out that it is not in the same position as the other public sector schemes for which the requirements appear to have been drafted.

Concerns about requiring the LGPS to provide ERI data were raised as far back as 2020. In its response to the PDP, the LGA explained that two required data elements — the ERI amount type and the accrued amount type — were drafted with reference to legacy and new pension provider bases, and the field had been made conditional.

“We mentioned in our response to the consultation on the draft regulations, the LGPS is in a different position to the unfunded public service schemes in that it does not have a legacy scheme. The McCloud remedy is provided by an automatic underpin,” it explained, and requested that the PDP clarifies what data the LGPS should enter in this field.

It also requested that “frozen refunds” be added to the list of exclusions as they pertain to the LGPS. Frozen refunds occur when an individual leaves a scheme without an accrued right. At present, they are not in scope for dashboards, but the DWP has suggested they might be included later.

The LGA explained that “there are tens of thousands of frozen refunds in the LGPS and we would like to see these addressed” within the exclusions set out in the PDP’s data standards and data usage guide.

“We would also like the limitations of service text that appears on dashboards to confirm that frozen refunds are not included. This will help manage user expectations and prevent unnecessary queries being raised with LGPS-administering authorities,” it said.