XPS Pensions Group is to sell its Master Trust pensions business XPS Pensions (Nexus) Limited to major Master Trust firm SEI for up to £42.5m.

XPS Pensions (Nexus) Limited is the principal employer and scheme funder of the National Pensions Trust (NPT).

NPT was founded in 2009 and is a significant Master Trust provider in the UK with over 60,000 members.

XPS Pensions said today it had entered into a option agreement to sell the division with the aim of creating a “market leading” DC firm for employers and pension scheme members.

XPS says the deal will create a strategic partnership between XPS and SEI. Under the deal XPS will provide services to continue to support NPT and SEI. 

The transaction is subject to regulatory approval.

SEI will pay cash of up to £42.5m with £35m of initial consideration and a deferred earn-out consideration of up to £7.5m based on business performance over two years. 

XPS says SEI will benefit from “enhanced opportunities” in the Master Trust sector while XPS will benefit as a key service provider to SEI.

SEI Master Trust provides solutions to employers providing defined contribution (DC) schemes to nearly 250,000 members.

The Master Trust encompasses investment management, member communications and administration, as well as a manager-of-managers' platform.

Paul Cuff, Co-CEO of XPS Pensions Group, said: "We are delighted to announce the agreement we have reached with SEI, which will create a market leading master trust for the benefit of our clients and their members. Under the partnership we have agreed, both firms will be bringing the best of what we each do to continue this exciting journey."

Steve Charlton, an SEI managing director, said: “As we continue to expand the SEI Master Trust, we believe we are well-positioned to provide the premier service, investment management, and technology solutions for our members. Our expertise—combined with the addition of XPS’ high-quality pension administration services—will further enable us to deliver improved member outcomes.