The pensions industry is divided on how to fund the pension dashboard project, with some calling for a new levy and others opposing it.
In a consultation paper published on Monday (December 3), the Department for Work and Pensions (DWP) announced the industry would be allowed to develop its own dashboards, alongside a non-commercial service hosted by the Single Financial Guidance Body (SGFB).
Providers will be expected to fund the project, with the DWP suggesting there may be an opportunity to use existing industry levies to fund the service "in a fair and equitable way". However, some providers are calling for a new levy to be created instead.
Kate Smith, head of pensions at Aegon, told FTAdviser the industry needed to ensure "no cost should be passed onto customers or advisers".
She said: "We believe a new levy should be created specifically for the pension dashboard development and ongoing costs. This should be a two-part flat fee levy, for those providing the data and for those physically providing the dashboard.
"This approach takes into account that all dashboard providers will have an equal commercial opportunity to support their business model."
Adrian Boulding, director of policy at master trust Now: Pensions, is also in favour of a new levy, not only for the dashboard but for the whole workplace pensions industry.
Currently, pension funds and providers pay an annual general levy to cover the cost of running The Pensions Regulator (TPR), the Pensions Ombudsman Service and The Pensions Advisory Service (TPAS).
But Mr Boulding said this system was outdated.
He said: "The current levy is [charged] based on numbers of members. Since the general levy was first created many years ago, automatic enrolment was brought in, reaching 10 million people but very little money. What we need with the dashboard is a new levy that will be based on funds under management."
He said every scheme needed to supply data for the dashboard therefore they all should pay a levy, which should be included in next year’s Pension Bill.
He said: "The minister [Guy Opperman] thinks he is in the front of the queue for getting legislation next year. He was quite explicit that the £5m that the Treasury has given to the dashboard is only to pay for DWP's own costs.
"It will not pay any of the costs of the SGFB which will host a dashboard, it will not pay any other costs of building and developing the systems. All of those costs are going to be met by the industry by a levy. For the levy to be equitable, it needs to be related to the size of funds."
Former pensions minister Sir Steve Webb, now director of policy at Royal London, has a different opinion, however.
He told FTAdviser: "We welcome the idea of raising funding for the dashboard from across the industry, not just from those who have led the way in getting the dashboard off the ground.