Actuaries association warns of data protection constraints to national pension trackers

The AAE said that new pension tracking services allowing consumers to centrally view and manage their pension data could help consumers "take more responsibility for their own finances and savings".

However, in a new report in which it looked at pension systems in six EU countries, including the UK, France and Germany, the AAE said that the ability to tie different pension plans to individuals in a central portal (32-page / 391KB PDF) could be hampered if the pensions industry could not access "unique identifiers" that can link individuals to their pensions pots.

"To combine information from state and occupational pensions it would be a great help if a unique identifier is available by which the information can be connected," the AAE said. "This unique identifier is available in all investigated countries, for example as a national insurance number or a social security number. Having a unique identifier only works if this unique identifier can be used by all the institutions that have to be connected. But this is not always possible for personal data protection reasons. Mostly this unique identifier can only be used by government controlled organisations."

The AAE said that interest in pension tracking services has been "growing" in recent years, and that the establishment of national pension tracking services could be a pre-cursor to a Europe-wide pension information system.

However, for national pension tracking services to be a success, a range of issues, including the "necessary" establishment of a "unique identifier that is used by all pension providers", must first be "dealt with", the AAE said.

It pointed to the need to prevent the misuse of consumer data and for greater harmonisation of the information provided to consumers about their pension savings, and said that consumers must be the only ones able to access their data through a system of "secured login".

The AAE said having a "legal basis" for national pension tracking services is not essential but can "accelerate the set up" of such a scheme.

In December last year, the Financial Conduct Authority (FCA) in the UK said that the case for the creation of a new national pensions tracker service – 'Pensions Dashboard' –  enabling consumers to see their total state, occupational and personal pension savings in one place, was "getting stronger".

The FCA said that although the creation of this new tool would be challenging and costly, it would be of particular benefit to the increasing number of savers with multiple pension pots and other sources of retirement income.

"Most members of the public find pensions complicated and dull, and any tool that would make it simpler for individuals to manage their pension savings would be a real boon”, pensions expert Alastair Meeks at Pinsent Masons, the law firm behind Out-Law.com, said. "The UK pensions minister last week called for the Pensions Dashboard to be implemented within the next two years, and that is a laudable ambition. As this report suggests, the challenge will be integrating the state and private sector systems – and in quite a lot of cases, setting up the private sector online systems in the first place."