The removal of restrictions on the national employment savings trust (Nest) could help to reduce the number of small pension pots.
Last month, the House of Commons' Work and Pensions Select Committee recommended lifting the contribution cap and the pension transfer ban on the operation of Nest.
Darren Philp, director of policy at the National Association of Pension Funds (NAPF), said lifting the restrictions was necessary to open Nest up to a broader range of staff and reduce the negative consequences of small pots.
This follows the Department for Work and Pensions' consultation Meeting future workplace pension challenges: improving transfers and dealing with small pension pots, which closed last month, which said auto-enrolment and a highly mobile jobs market would lead to about 4.7 million additional small pension pots.
Philp said: "There are lots of small pots out there. We know small pots are not economic to administer, people lose engagement with them and can even forget they have them. If people have a small amount of pension saving, it is better they have it in one place."
Read more about the national employment savings trust