On the go: The Money and Pensions Service has been urged to look into how commercial companies could be used to deliver Pension Wise guidance as part of a government-backed report looking at how the organisation can be improved.
A review of Maps, carried out by Tom McPhail, director of public affairs at the Lang Cat, and supported by a team from the Department for Work and Pensions, called for the guidance body to look at how Pension Wise can be reformed to achieve “more efficient and effective outcomes”.
This included considering how commercial companies could be used to deliver Pension Wise guidance, and how Maps works with pension providers while remaining impartial.
The report, which was carried out between April and July 2021 and published on Monday, said providers delivered information and guidance services themselves, as well as regulated advice in some cases, and these services had a tendency to duplicate or overlap with the guidance provided by Pension Wise.
McPhail stated: “Retention of the impartiality of Pension Wise is essential for trust, credibility and to act as a barrier to commercial bias in the provision of information and guidance to customers.
“Within that constraint, there may be scope for Maps to develop new forms of Pension Wise guidance that achieve more efficient and effective outcomes.”
McPhail called on the organisation to publish an options paper by October 2022, which will explore the practicalities of using commercial organisations to deliver Pension Wise.
He added: “There remain challenges in how pension providers hand off customers to the Pension Wise service.
“Appointment booking mistakes and delays can disrupt the customer journey and undermine acceptance of the service. This can create a risk to customers from fraudsters.”
The report also called on Maps to clarify with the DWP and the Treasury what budget is needed to make the pensions dashboards programme a success.
Maps is currently working to deliver a pensions dashboard that will allow people to access all their pensions information securely and in one place.
The Pensions Dashboards Programme is in charge of developing the infrastructure in order for others to develop their own dashboards, with Maps creating one of its own.
At present, the cost of the PDP is taken from within Maps’ overall budget, meaning extra costs could see money taken away from other areas of the organisation.
McPhail said: “It is essential there is clarity and alignment across Maps, the DWP and HM Treasury on what the spending needs and priorities are in respect of the PDP and Maps’ wider obligations and how they should be met.
“In the absence of such understanding, there is a high risk of disappointing expectations in some aspects of Maps’ performance in the years ahead.”
He added that the dashboards programme was a “complex project” and there are “many ways in which it could fail”.
Therefore, the funding of this development stage of the project is “critical”, McPhail said.
He added: “Compromises on development costs could prove a false economy if they subsequently lead to the project failing to satisfy the expectations of its architects and the needs of pension savers. Costs are expected to increase significantly over the immediate future.
“This has budget implications for Maps as a whole. In the longer term, it is not clear what the steady state maintenance costs of the PDP might look like.”
This article originally appeared on FTAdviser.com
