A pension dashboard that consolidates all of an individual’s pension and retirement information using pre-populated data would make it significantly easier for Canadians to access and understand their retirement savings, according to a new report by the C.D. Howe Institute.
“Canada’s current retirement landscape offers numerous savings vehicles, giving individuals more choices than in the past,” said the report. “Yet, as retirement vehicles shift increasingly toward defined contribution plans with uncertain payouts, it becomes harder for Canadians to gauge their future retirement income.
“In the face of multiple account balances, government retirement benefits that are difficult to predict as well as unpredictable factors like investment returns and longevity, Canadians need clearer guidance and consolidated information.”
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According to the report, a pension dashboard could include an individual’s entitlements from employer-sponsored retirement plans as well as government programs such as the Canada and Quebec Pension Plans and any private savings if added to the dashboard by the individual.
It noted several countries already use pension dashboards, including Australia, Belgium, Denmark, Israel, the Netherlands and Sweden, while the U.K. is currently finalizing its own pension dashboard and a similar initiative is under discussion in the U.S.
“As policymakers look abroad for best practices, it will be essential to tailor any pension dashboard solution to the nuances of the Canadian retirement system, ensuring it addresses the distinct mix of public and private savings vehicles.”
The report also outlined several considerations regarding cost, privacy and user engagement. Setting up and maintaining a national dashboard would require investments from one or more of the stakeholders, including governments and plan sponsors, it noted.
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In addition, any system providing access to detailed financial information would require robust security protocols to ensure data is both protected and accessed only by authorized individuals. “Technological developments, including [artificial intelligence] and open-banking initiatives, if expanded beyond bank accounts, would make it increasingly necessary to adopt a more secure live-request model rather than a less secure, large and centralized database.”
User adoption of the dashboard is equally critical, said the report, noting if the interface is cumbersome or difficult to navigate, individuals may not take advantage of the tool.
“Canada already has partial infrastructure and data sources that could be adapted to build a comprehensive pension dashboard and many experts believe AI could further streamline data collection from government registries, financial institutions and private pension administrators. This automation could reduce operational costs and ease the burden on plan sponsors, who would otherwise have to submit data manually.”
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