A pensions initiative from the CIPP

01 July 2020

Henry Tapper, chief executive officer of AgeWage, reveals the details

The times call for a fresh and innovative approach to help staff facing an uncertain future. The prospect of reduced work prospects faces many of us – especially furloughed staff. This article looks at an initiative taken by the CIPP to help employers and ultimately staff to better understand their workplace pension and the help they can offer.

The CIPP is embarking on a major pensions initiative which I’m proud to be a part of. The aim is to help employers get meaningful data about the value they and their staff are getting from their workplace pension. It’s hoped that this will lead to this data being shared with staff.

The CIPP is well-placed to be authoritative on pension data. The contribution histories that underpin people’s workplace pension savings are created as a result of data feeds from payroll and payroll has been responsible for the accurate deployment of the auto-enrolment project.

The government’s current campaign is for employers and savers to get to know their workplace pensions and this initiative does just that.

By signing up to the CIPP pilot, employers will trigger a data request to pension providers to share contribution histories and individual pot values with AgeWage (of which I am the founder). AgeWage has already analysed more than 1,000,000 individual’s pension on behalf of insurers, master trusts and the governance committees and trustees of individual employers.

AgeWage will analyse the data, saver by saver, and then issue a report to each employer on the aggregate data. Since all data is anonymised, neither the employer nor AgeWage will be able to see individual employee details; however, where an employee makes a request, their data will be available under the General Data Protection Regulation.

Key performance indicators

The key to the pilot’s success will be two things.

• Firstly, the pilot will test whether individual members of the CIPP are willing and able to make the request on behalf of their employer or influence the employer to make that request. The CIPP is asking its membership to stick its neck out and take the initiative – but the Institute recognises that many large employers will need to make the request after being satisfied that full risk mitigation on data protection is in place.
• Secondly, the reports provided by AgeWage need to add value to those who receive them. The AgeWage report is innovative, providing a score for each employer which can tell the employer, on a scale from 1–100, how much value their staff have got from their pension to date. The report allows employers to see these scores broken down by staff joining dates and age groups and will also produce an outlier report showing records where data may be wrong.

If, following the conclusion of the pilot, the CIPP considers that both questions have been answered positively, the CIPP will roll out the report service to a wider group of employers.

Eligibility for the pilot

The CIPP is looking for up to 25 employers to volunteer. As part of the pilot, AgeWage will, for these employers, waive its normal initial fee of £7,500 plus VAT so that participation will be free for these employers.

To be eligible, the employer must have at least 300 employees in their workplace pension and that pension must have been with the same provider for at least three years.

The employer must agree to abide by the data collection process agreed between AgeWage and the CIPP and provide feedback to the CIPP on the output of AgeWage’s work and on the ease of use of the data collection process.

The link to financial education programs

The CIPP would like the scoring system pioneered by AgeWage to become integrated into employers’ financial education programs. AgeWage is currently testing a way to transmit individual scores to members in a safe way. The scores are very simple and emotive, telling people how they have done. They could be construed as advice, especially when viewed by staff alongside scores for other pensions. AgeWage has been asked by the Financial Conduct Authority (FCA) to trial the distribution of scores to around 350 individuals in the FCA’s Sandbox (part of its innovation hub).

Once the FCA and AgeWage are satisfied that distributing scores to members is both safe and worthwhile, we will work with the CIPP to determine how best these scores can be distributed to staff. Suggestions so far have focussed on pension statements, payslips and digital mail drops. Offering the scores digitally will enable a click-through to an educational app reinforcing existing messaging and introducing next steps to staff looking to turn pension pots into retirement plans.