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Shared Expertise
Empower Retirement to Acquire Retirement-plan Business of MassMutual
mpower Retirement and Massachusetts experience with a shared focus on the customer. We sponsored by a broad spectrum of employers. These Mutual Life Insurance Co. (MassMutual) are excited about the opportunity to reach new cus- include mega, large, mid-size, and small corporate announced they have entered into a tomers and serve even more Americans on their jour- 401(k) plans; government plans ranging in scale from
definitive agreement for Empower to acquire ney toward creating a secure retirement.” state-level plans to municipal agencies; not-for-
the MassMutual retirement-plan business. The acquisition will capitalize on both firms’ expertise, provide technological excellence and deep prod- uct capabilities, and create scale to the benefit of retirement-plan participants and their employers.
Based on the terms of the agreement and subject to regulatory approvals, Empower will acquire the retirement-plan business of MassMutual in a reinsur- ance transaction for a ceding commission of $2.35 billion. In addition, the balance sheet of the trans- ferred business would be supported by $1 billion of required capital when combined with Empower’s existing U.S. business.
The MassMutual retirement-plan business com- prises 26,000 workplace savings plans through which approximately 2.5 million participants have saved $167 billion in assets. It also includes approximately 2,000 employees affiliated with MassMutual’s retire- ment-plan business who provide a full range of sup- port services for financial professionals, plan spon- sors, and participants.
“Empower is taking the next step toward address- ing the complex and evolving needs of millions of workers and retirees through the combination of expertise, talent, and business scale being created,” said Edmund Murphy III, president and CEO of Empower Retirement. “Together, Empower and Mass- Mutual connect a broad spectrum of strength and
The transaction, expected to close in the fourth quarter of 2020 pending customary regulatory approvals, will increase Empower’s participant base to more than 12.2 million and retirement-services record-keeping assets to approximately $834 billion administered in approximately 67,000 workplace sav- ings plans.
“In Empower, we are pleased to have found a strong, long-term home for MassMutual’s retirement- plan business, and we believe this transaction will greatly benefit our policy owners and customers as we invest in our future growth and accelerate prog- ress on our strategy,” said Roger Crandall, Mass- Mutual chairman, president, and CEO. “This includes strengthening our leading position in the U.S. protec- tion and accumulation industry by expanding our wealth-management and distribution capabilities; investing in our global asset-management, insurance, and institutional businesses; and delivering a seam- less digital experience — all to help millions more secure their future and protect the ones they love.”
The MassMutual retirement-plan business has grown substantially over the past decade, with the number of participants served doubling to more than 2.5 million and assets under management more than quadrupling from $34 billion to more than $160 billion.
The combined firm will serve retirement plans
profits such as hospital and religious-organization 403(b) plans; and collectively bargained Taft-Hartley plans. The transaction will also bring MassMutual’s defined-benefit business under the umbrella of plans Empower serves.
Empower and MassMutual intend to enter into a strategic partnership through which digital insurance products offered by Haven Life Insurance Agency, LLC3, and MassMutual’s voluntary insurance and life- time income products will be made available to cus- tomers of Empower Retirement and Personal Capital.
Empower today administers $667 billion in assets on behalf of 9.7 million American workers and retir- ees through approximately 41,000 workplace savings plans. Empower provides retirement services, man- aged accounts, financial wellness, and investment solutions to plans of all types and sizes, including pri- vate-label record-keeping clients.
In August, Empower announced it had complet- ed the acquisition of Personal Capital, a registered investment adviser and wealth manager. The Per- sonal Capital platform offers personalized financial advice, financial planning, and goal setting, providing insights and tools for plan participants and individual investors. In addition, Empower’s retail business pro- vides a suite of products and services to individual retirement-account and brokerage customers. u
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