A pension dashboard that shows all a client’s assets may make retirement withdrawals decisions easier.NicoElNino/AFP/Getty Images
Knowing all the client assets and their location is paramount for advisors to provide the most appropriate advice on matters related to retirement planning. Too often, advisors deal with piecemeal information from some clients.
Enter a pension dashboard, where every Canadian could log on and see everything from government and workplace pensions at a glance. It’s not a service available in Canada, but the C.D. Howe Institute thinks it’s something that would be beneficial.
The concept of a pension dashboard is not new, notes Kathryn Bush, a senior fellow at C.D. Howe and author of a recent report, Roadmap for Retirement: The Case for a National Pension Dashboard.
Countries such as Sweden and Denmark adopted dashboards to educate clients on what they have and any possible shortfalls they need to make up.
Globe Advisor spoke with Ms. Bush recently about her report.
Why did these countries set up a pension dashboard?
Some were worried about lost retirement accounts. People are changing employers more frequently than in the past. Workers may forget they had a vested amount in a pension plan [from a former employer]. In 2023, administrators of Ontario registered pension plans reported $3.6 billion in lost retirement accounts.
The dashboard would be another way to help people find these lost accounts. That’s good for the individuals who can find their money, and it’s good for pension plan administrators who can then discharge their responsibility to get these amounts to people.
Who sets this up?
It would be a significant undertaking to set this up. It would need government assistance to get the information to feed into the dashboard. Because asking people to plug everything in themselves is a barrier. It must be usable; we must get people into it. If they must find all the forms and do everything themselves, that will leave a lot of Canadians not using it.
What would people see on the dashboard?
Everyone’s issues are different, but as one of the main goals, the dashboard would show accumulated savings and government entitlements as a monthly income for the individual.
Many other tools and simulators could also be included in the pension dashboard. For example, tools could also be included in the pension dashboard that would assist a retiree deciding what asset to withdraw first, or whether to pay down a mortgage or make an RRSP contribution.
What about privacy issues?
There are concerns with respect to privacy. While the federal government already knows your RRSP, TFSA, pension plan and what you’re going to get from the Canada Pension Plan and Old Age Security, safeguards would be necessary to protect the information on the pension dashboard.
What is the benefit of having a dashboard besides seeing all the assets?
It helps to increase knowledge. Recent surveys have consistently shown that Canadians are concerned that they will outlive their savings. People need to understand what their accumulated savings, together with government entitlements, will produce as a stream of retirement income. They need to know if they are saving enough for the future or need to alter their plans.
How would this benefit financial advisors?
Advisors should be very interested as [pension plan] members get to see those assets that are sprinkled all over. To see them consolidated in one spot is helpful for planning. In addition, the lost accounts represent billions of dollars sitting on the sidelines, not being invested.