GenLife has merged with Smart Pension just a year after the latter launched.
The deal will see Smart Pension administer the GenLife Master Trust which will run alongside Smart’s Master Trust.
Both providers use Legal & General Investment Management for fund choices so bosses said pension members “will not see any difference and it will be business as usual”.
The new combined business will be known as Smart Pension, which has formally taken over as sponsoring employer of the GenLife Master Trust.
Smart Pension was only launched in 2014 by Andrew Evans and Will Wynne.
Mr Evans, chief executive at Smart Pension, said: “It makes a great deal of sense to combine our operations as this delivers immediate scale, which is so important in the auto-enrolment market.
“This is a significant development in the market and we expect more consolidation to happen in the months ahead.”
Nick Ayton, managing director and founder at GenLife, said: “Smart Pension share the same ethos as we do and there are many synergies. They are clever people and passionate about delivering great services and value for pension members.”
Mr Ayton said: “I predicted there would be some market consolidation as many believe there are too many small automatic enrolment providers and we saw an opportunity that made sense.”
Mr Wynne, managing director at Smart Pension, said: “It has been coming for sometime and we decided it was great timing to join forces because scale matters and GenLife is a great match to the things we are trying to achieve.”
Last month around 70 per cent of small employers announced they expect to rely on an adviser for practical assistance with auto-enrolment, as The Pensions Regulator says advisers are “far better placed” to help employers meet their pension duties.
The regulator’s research, published today (5 August), warned that hundreds of thousands of small and micro employers still do not know the exact date when they need to start to comply with the pension laws.
It estimates that, over the next two years, around 1.8m small and micro employers will need to act as a result of automatic enrolment duties.
emma.hughes@ft.com
