The pensions industry is warning without compulsion the most important pension data will not be captured by the dashboard, which could pose an unacceptable risk for consumers.
The pension dashboard is supposed to launch in 2019 as an initiative to allow savers to see information on all their retirement savings in one place.
But Adrian Boulding, director of policy at Now: Pensions, said without legislation it will be impossible to get information on all occupational pensions on the dashboard.
He said: "[Legislation] is absolutely necessary because some schemes don’t want to [submit the data] as they fear increased transfer activity, and some schemes can’t do it [because] the trustees asked their lawyer and were told that the trust deed doesn’t allow them to spend members’ money doing this.
"Without compulsion, I don’t think the dashboard will become anything more than a pension finder service."
Sir Steve Webb, director of policy at Royal London and former pensions minister, agreed and said the most important data for dashboard users will be the pensions they may have forgotten about.
He said: "Without compulsion, the most important data will be missing."
Yvonne Braun, director of long-term savings and protection at the Association of British Insurers (ABI) warned an incomplete dashboard would lead to "consumers making poor decisions on the basis of information that is not comprehensive".
"In the long-term an incomplete dashboard would pose an unacceptable risk to consumers," she said.
Kate Smith, head of pensions at Aegon, said without compulsion "it could take years for the momentum to build to reach coverage of the entire pensions sector".
Compulsion was also called for by the Work and Pensions select committee in a report published in April.
Last month the government said it would let the industry take lead on the project as it shied away from committing to force providers to submit client data.
Last week (19 October) pension minister Guy Opperman refused to answer questions on compulsion at a conference.
However, in a written answer to Parliament on October 16, he had stated the DWP was "working through the options around scheme participation in any potential pensions dashboard".
Details on the government's approach are expected to feature in its feasibility study, out later this year.
So far the DWP has spent about £100,000 on the dashboard feasibility study, which was originally tabled to be published in March.
Ms Braun believes the government is already convinced of the need for compulsion and was "just debating the 'how'".
"We will continue to press them on this," she said.
Sir Steve agreed the government had not ruled legislation out. He said: "Once they have finalised the governance structure for the dashboard I think they will be clearer as to the role of legislation – because you need to know who you are requiring to send what to who."
Former pensions minister Baroness Ros Altmann, on the other hand, was more pessimistic.
She told FTAdviser: "I really don't believe the government will legislate for compulsory participation on the dashboard. Legacy schemes would incur significant costs."
However, she thought even a dashboard for modern pensions would help younger people keep track of their auto enrolment pension records.
Not all hope is lost, according to Fiona Tait, technical director at Intelligent Pensions.
She said: "If the government is unwilling to legislate for compulsive participation at the current time it does not mean they will not do so in the future.
"One of the best things the industry could do is to get the dashboard up and running with the current project participants so that people could see the advantages for themselves.
"Once this has happened the government are likely to find it easier to legislate on the back of a successful and popular initiative."
maria.espadinha@ft.com
