While there is a strong case for enacting new laws enshrining the pensions dashboard initiative the government has admitted Brexit pressures are making the process more difficult.
Speaking at a roundtable held by Which? on 20 February, Department for Work and Pensions director Julie Gillis said new legislation and compulsion, in relation to data formatting and collection, were critical to the success of the project.
She also confirmed a feasibility study, first announced by pensions and financial inclusion minister Guy Opperman last October, would be released next month.
Gillis said: “We’ve been doing research with other countries, and there is a strong case for new legislation and compulsion; especially in terms of its format and timing of data. In terms of ambition, I think the challenge we are facing is two-fold, and in terms of coverage we certainly need legislation.”
She added the DWP is doing its best to see if there is room to get legislation in place, but it is proving to be difficult with “everything going on with Brexit.”
She added: “But we must still be pragmatic and see how we can work with the industry.”
The pensions dashboard will give consumers access to all their pensions data in one place. The government has set a 2019 deadline for the project.
Speaking at the Which? Roundtable, New City Agenda financial services consumer panel and director of policy Dominic Lindley outlined key recommendations from a policy report he commissioned, The pensions dashboard – how we can make it work for consumers.
Lindley said the government should “introduce legislation to give consumers a clear legal right to access all of their pension data in one place in an electronic format”, and that it should “act quickly” in order for the dashboard to be successful.
He added: “If people are going to be able to use it, they need motivation and trust that nothing will go wrong.”
Independent body
According to Lindley, the government should establish an independent body to govern the dashboard initiative.
However, Aviva strategy projects director James Ward said there are already two regulators in the pensions world, and new regulatory body would add “too much confusion”.
“Instead, the Financial Conduct Authority and The Pensions Regulator will need to take on new powers and new activities to make sure the dashboard is successful.”
Money Advice Service policy manager Theresa Fritz agreed: “Who does the regulatory body report to? Who is the hierarchy? Where would that independent body sit within the regulatory framework?”
She added: “It is important we are clear what these standards are. I’m all for independence, and having a group that represents all of the interests, but I do wonder what would happen if someone breaks the rules or there’s a grey area.”
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