Partner Anna Rogers comments in Professional Pensions on the impact of the pensions dashboard on DB schemes and administrators
The impact of the pensions dashboard project on defined benefit (DB) schemes and administrators is “a worry”.
Anna Rogers commented:
“They are a great idea in principle, but I do worry about the impact for DB schemes and administrators. Firstly, just responding to enquires will put a big new burden on every scheme. In practice, the work will be soaked up by the administrators but every scheme will get every single enquiry, which is expected to be millions. They will be coming in round the clock, 365 days a year. This is likely to put up costs of administration.”
“Secondly, in many cases it will be impossible to give people information that is both understandable and accurate. Some compromise between the two will be necessary. Different kinds of benefits behave very differently (DC, DB, personal pensions, State). They are payable at different ages. Giving figures at a single ‘normal’ payment age may mask valuable early retirement rights. They also have different pension increases and survivor benefits.”
“Thirdly, if the information is wrong, and with the best will in the world it’s inevitable that sometimes it will be, who is liable if members act in reliance on it, in ways they later regret?”
“And fourthly, admin systems were designed to deal with events that happen to individuals – death, retirement. Scheme-wide information is only needed for valuations and approximations are fine. Now schemes will be expected to produce detailed breakdowns for all deferred members at the same time. Some schemes are simple, but many have different rights for different periods of service.”
“The industry can’t say when we can be ready until we know exactly what we have to be ready for.”
Read Anna’s comments in Professional Pensions.
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