The company says the decision came “in direct response to the Pensions Regulator’s new authorisation regime”, which it said, made pursuing master trust authorisation “cost-prohibitive for many small and medium-sized trusts.”
Following a strategic review, the Welplan Board concluded it was no longer viable to continue to support the scheme in the long term and as such it was necessary to withdraw from the market, which Welplan says will “inevitably experience significant consolidation in coming months”.
The firm says it will continue to support its existing 1,900 participating employers and 55,000 individual members until they can be transitioned to a new provider.
Welplan says it will be actively seeking an appropriate new home for its members and employers.
The scheme has not been accepting any new participating employers since Monday 11 March.
Welplan will continue as an employee-benefits brand – an area it plans to grow – and its employer and employee members will continue to have uninterrupted access to its industry-wide sickness, accident, death and other products.
Bruce Kirton, chief executive of Welplan Pensions, said: “This has been a very difficult decision.
“We’ve been around since 1960 and have operated a multi-employer DC scheme since 1988.
“We’ve always been and will remain committed to offering the best possible service and value to our employers and their members in both pensions and employee benefits.
“But, over the last six months it has become increasingly clear that the master trust regulatory environment is one that favours much larger scale.
“There is now no meaningful place for a small or even medium-sized specialist business such as Welplan Pensions.
“This is something we’ve already seen with other smaller providers being acquired by larger ones.
“Welplan Pensions is closed to new employers but we'll carry on giving our pensions clients great customer service until we can find an appropriate master trust to take on those clients in future.
“We will then focus on continuing to build our long-standing employee benefits business.
“We are very proud of our 60 year heritage here and have a consistent track record of offering innovative good value products and services to meet the needs of the modern workforce.”