Ms Altmann said pension consolidation would help schemes cut down on cost, especially administrative and investment management costs.
But Gatemore argued the cost of consolidation, such as legal and other upfront merger costs, may not dilute on-going fixed costs for the majority of schemes and may not be offset over the medium-term.
This was particularly true for smaller schemes with assets under £500m, it said.
In contrast, the firms believes one of the biggest issues facing pension funds was the size of the largest players, which “restricts their ability to deliver returns”.
“Consolidation will not help schemes to diversify their investment universe - by becoming larger the investment universe shrinks, rather than grows,” the firm stated.
“In addition, a few large investors, chasing a few large infrastructure projects tends to bid down yields,” it added.
William Burrows, retirement director at Better Retirement, said: “One the one hand it makes sense for DB schemes to pool their resources to benefit from economies of scale and to access larger investment opportunities but one the other hand, it makes sense for schemes to keep their independence and tailor the benefits for scheme members.”
He said the ‘elephant in the room’ was trust, which was what often prompted members to try to transfer out.
“Rather than look for large scale consolidation, it might be better to look at ways at restoring trust in DB pensions,” Mr Burrows said.