Source · Select Committees · Work and Pensions Committee
Recommendation 12
12
For CDC schemes to provide a realistic alternative to annuities, people with defined contribution pension...
Recommendation
For CDC schemes to provide a realistic alternative to annuities, people with defined contribution pension pots need the option to be able to transfer to decumulation- only CDC schemes. In future these may be available through master-trusts regulated by the Pensions Regulator. We recommend that the Financial Conduct Authority consider whether there is also a case for developing contract-based CDC schemes and publish its findings. (Paragraph 53) Supporting decision making at the point of access
Government Response
Acknowledged
HM Government
Acknowledged
We will consider this recommendation in more detail. DWP is part funding, and sits on the steering group of, a Pensions Policy Institute DC data project to provide individual-level data of pension provision across a number of Automatic Enrolment schemes; specifically, the number of pension pots held by a member, contributions and pension fund size. This is a data amalgamation project, using real data Government and Financial Conduct Authority Responses to the Committee’s Fifth Report 11 for individuals saving, or having saved, into a pension in the UK. It will link the various pension pots which individuals have with different providers, to create a single combined data set that tells us how people are saving for their retirement. The government set out in its response to the dashboard consultation in April 2019 the key design principles that must be adhered to when designing the system. We made clear that the storing of pensions data, beyond caching for performance reasons, will not be allowed in the initial phases of dashboards. We also said that there would be no aggregation of an individual’s information in any part of the ecosystem other than by the pension scheme or an Integrated Service Provider operating on their behalf and in respect of the benefits built up in that scheme. The process of accessing information on dashboards rests on the consent of the individual using dashboards. The nature of an individual’s consent must be clear, explicit, understood and informed. This is explored in further detail in the recently published consultation on the draft Pensions Dashboards Regulations. Our approach is designed to maximise data security and privacy while the new system beds in. Therefore, the dashboards digital architecture would not be able to facilitate the aggregation of individuals’ data to support wider research or policy intervention. MaPS is developing a retirement planning hub in which it will incorporate its own pensions dashboard. This will be used to help support people with personalised guidance at every stage of their pension journey.