Articles - Four pensions dashboards pitfalls to avoid


When navigating unknown territory, it’s all too easy to make mistakes. In this article, we highlight some pitfalls schemes and employers should avoid.
Pensions dashboards are coming. It’s an exciting time for trustees, employers, and the providers and administrators who support them. Hopes are high that dashboards will herald a new dawn of pension scheme engagement. However, pension schemes and employers must work with their providers to get to grips with the underlying complex data project.

 By Geraldine Brassett, Senior Consultant at WTW

 If data is correct from the outset, savers will see their correct pensions entitlements appearing on their dashboards. This will likely boost trust and engagement, both with dashboards and pension saving more broadly.

 Conversely, if the industry does not get data right, members are unlikely to reconnect with missing pension entitlements. If people can’t find some of their pensions or information is incorrect, one of the dashboards project's most fundamental objectives will fail. This will damage consumer confidence in dashboards and create more work for the industry as people raise queries with their providers.

 When navigating unknown territory, it’s all too easy to make mistakes. Here are some pitfalls that schemes and employers should avoid falling into.

 Data that doesn’t match
 Having the wrong data on file for a scheme member is an easy mistake to make, as the examples below will show. However, now that dashboards are coming, it is vital that data matches – otherwise, people may find that one or more of their pension schemes are missing from their dashboards.

 An employer having the wrong National Insurance number on file for an employee is one example and essentially happens because it’s easy to enter them incorrectly on the system. An employee seconded from overseas may be given a temporary National Insurance number, which is not updated.

 Global employers may have systems which require them to enter birthdates in American format. This could then create matching errors on pensions dashboards.

 The solution
 Do not dismiss data issues as solely an issue for trustees to manage; the quality of data starts with employers. Be aware that mistakes can happen and discuss how to address them with your administrator and/or pension provider.

 When active members don’t see their pension scheme appearing on their dashboards, they might contact their pension provider. In many cases, the provider would be powerless to correct the data and be forced to pass the issue back to the employer. The employer would then need to correct the data and pass it back to the provider.

 One solution to this conundrum is checking that your pension provider can promote people to full matches on the system before the data is updated. Not all providers can do this, but it is worth employers or trustees asking the question. Taking this simple step early could avoid a lot of administration later.

 Additional Voluntary Contributions (AVCs) which don’t appear on dashboards
 Trustees may be looking after several separate closed AVC schemes. With no new money being saved in these dormant schemes, updating people’s data is often unnecessary.

 The solution
 Trustees are responsible for making sure that AVC data is available to be pulled into pensions dashboards. They should get the ball rolling now, understand how they will connect AVCs to pensions dashboards and work on updating their AVC data with their administrators and AVC providers.

 Being unprepared for an influx of queries from a specific population
 When dashboards go live, how many queries will pension schemes, employers and providers receive from members? As of now, it’s untested, and we don’t know. However, one action employers and schemes could take now is to try and pre-empt the concerns of any populations which are expected to be particularly dashboards-curious.

 For example, many pension schemes have cohorts of members past the age when they could retire but have not yet taken their benefits.

 The solution
 Identify now the populations who are likely to be primarily engaged with dashboards. What questions might they have? Is any data missing which needs to be updated?

 Monitor the Pensions Dashboards Programme’s live testing closely. Once this happens, it will likely illustrate the questions members will most likely have. Meanwhile, think about pre-emptive steps you could take now, such as tracking down older deferred pensioners you have lost contact with and checking that you have matching data for members with multiple records. Your administrator or provider will help you to identify those people.

 Flagging an active member as a false leaver and vice versa
 For many reasons, someone might be flagged as a false leaver (or joiner). An employee might decide to stay, having already handed in their notice. In that scenario, they may already have been flagged as a leaver and taken off the dashboard. They may change payrolls if they move office or get seconded.

 The solution
 Employers and providers should ensure their systems are set up to manage their changes, including joiners and leavers, seamlessly. Take the time now to review your interfaces and processes. Pensions dashboards will shine a microscope on scheme data, and the industry and pension schemes must be ready. 

Back to Index


Similar News to this Story

Will general election call shake up pensions policy agenda
With the Prime Minister calling for a summer election, LCP Partner David Fairs looks at how this could affect the pensions policy agenda. What does th
Risk Transfer do more insurers mean more capacity
Nikhil Patel takes an in-depth look at current trends in the risk transfer market, including the implications of record-breaking demand and how new en
Aiming for calm seas in our market reforms
The size and scale of the UK financial sector is worth reflecting on. It employs more than 2.5 million people and produced £278bn of economic output,

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.