The chair of the Pensions Administration Standards Association (PASA) has urged the government to force pension providers to sign up to the pensions dashboard, saying she anticipated “resistance” from some.
Margaret Snowdon (pictured) called on participation in the dashboard project to be made compulsory for all after she found defined benefit (DB) pension providers were not keen to share their data.
In an interview with the FT she said: “Defined benefit pensions are where there is most resistance and reluctance.”
“Unlike newer defined contribution schemes, DB schemes do not have much online presence, so there is more work for them to prepare their data for the dashboard and they are put off by the cost and effort.”
Snowdon is a member of the Treasury pension dashboard steering group, which oversees the implementation of the project, a prototype of which is due to be created by March.
Set to be launched in 2019, the dashboard has so far attracted the involvement of 17 providers on a voluntary basis.
The Treasury said it was keen to give providers the chance to sign up voluntarily before implementing any new legislation.
A spokesperson said: “We want to see the rest of the industry join for the next phase of the project and have been clear that if this doesn’t happen, we may legislate to ensure no one misses out on seeing information on all their pension pots in one place.”
However, Snowdon urged the government to act now to prepare the industry for compulsory sign up in 2021, two years after launch.
She said: “It needs to act now to prepare the ground for compulsion in 2021, as it would be rather foolish to wait until 2019 to then say we need to get started.” She suggested the Treasury could offer tax incentives in the form of VAT relief to encourage involvement.
The steering group works closely with the Association of British Insurers (ABI), which recently confirmed that businesses involved will have to pay £50,000 each, exclusive of VAT, towards the cost of the dashboard.
ABI long-term savings and protection policy director Yvonne Braun agreed the voluntary approach might not work in the long-term.
She said: “It remains likely that the voluntary approach will only get us so far and we believe legislation will almost certainly be needed further down the line to ensure the dashboard is as useful as possible to the greatest number of people, including members of trust-based schemes.”
‘Avoiding A Capacity Crunch’Royal London director of policy Steve Webb also agreed with the need for compulsory involvement but said it would be unreasonable to ask all participants to work to the same compulsory deadline.
He said: “A timetable of phased deadlines, possibly according to scheme size, is needed as soon as possible if the government does decide to go ahead with this proposal, to avoid a capacity crunch and people burying their head in the sand.”
He added: “I’m not sure I agree with the tax incentives Margaret suggests as if able to do work on this over a long period, schemes can spread the cost over years. This is work, to be honest, they should have done anyway.”