To the general public, proving who you are seems straightforward. We are used to answering security questions to access bank accounts and other services. So why should a pensions dashboard be different? Surely we just provide the usual information – name, address, date of birth, National Insurance (NI) number - and then our pension providers will tell us about our pensions?
Sadly, the process is likely to be much messier than that.
Firstly, many pension schemes and providers will have data that is incomplete or inaccurate, particularly for deferred members. For example, most people who move house don’t update their old pension providers. So, even in well-run and well administered schemes, a good chunk of address data is likely to be out of date.
NI numbers would seem to be an essential part of any matching exercise, but there is a problem. The dashboard will have a ‘verification’ process whereby a scheme can be confident that name and date of birth has been independently verified, but it is not currently envisaged that the NI number will be verified. If it is simply asserted by the user, should the scheme take it at face value? And what happens if they trust it and end up sending out the wrong data?
Perhaps a more realistic scenario is one where the user mistypes one character of their NI number. If there is a match on name, date of birth and address, then many schemes would regard that as good enough, and would supply data. But what if the NI number is not just ‘slightly’ wrong but is completely wrong – should that be a red flag?
One of the strangest features of the proposed approach is that each pension provider and scheme will make its own call on the data matching standards it will apply in order to determine whether there is a match or not. This means that the same member, supplying the same information, could find some pensions but not others, simply because different schemes and providers have set the bar in a different place.
Indeed, there is a possibility that risk-averse schemes could decide that unless there is a 100% match in all respects they will simply send back a nil return. After all, there is presumably no risk to a false negative, whereas sending out personal data on the basis of a ‘false positive’ match could potentially lead to claims for compensation etc. This could mean that a project designed to ‘reconnect’ people with their pensions fails in its central objective.
There are no easy answers in an area as ‘fuzzy’ as data matching, but I find it hard to believe that the right answer is a free-for-all where schemes decide their own approach
This article was featured in Pensions Aspects magazine May 2021 edition.
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