Denver-based recordkeeper Empower today reported record earnings of $236M for Q2 2024, representing an increase of $38 million or 19% growth year-over-year.
“As the broader macroeconomic picture and the markets present challenges, we will continue to deliver what individuals need to help them on their path to greater financial security.”
Empower President and CEO Edmund F. Murphy III
The growth is primarily due to strong organic sales, a rise in fee income resulting from higher equity markets, and higher surplus income, the company said in a press release today. Sales momentum in its Workplace Solutions unit—up 14% with strong momentum across segments, including the public plan sector, and its Empower Personal Wealth unit—which expanded assets under administration (AUA) 23% over 12 months as sales from defined contribution plans experienced strong expansion—were also credited as contributing to the growth.
“At the center of Empower’s value proposition is the delivery of advice and service to investors of all types who are coming to us in increasing numbers to provide retirement and wealth management services,” said Empower President and CEO Edmund F. Murphy III. “As the broader macroeconomic picture and the markets present challenges, we will continue to deliver what individuals need to help them on their path to greater financial security.”
Empower administers more than $1.6 trillion in assets for 18.6 million individuals.
The recordkeeper released results as part of a broader quarterly announcement of record base earnings for the fourth consecutive quarter by its parent company, Winnipeg-based Great-West Lifeco.
“Our strong momentum is supported by market-leading franchises with focused and disciplined execution of their growth strategies. As we work to deliver for our customers, we continue to drive sustainable and profitable growth for our shareholders, leading to a fourth consecutive quarter of record base earnings,” said Paul Mahon, President and CEO, Great-West Lifeco. “We are executing against our ambitions in the U.S., surpassing the growth expectations we shared in 2023 and reiterated for 2024. While our U.S. segment is on course to become our largest by earnings this year, we continue to make progress across our portfolio of companies to strengthen and support our long-term success.”
During the quarter, Empower Personal Wealth, established in January 2023, recognized that 23% growth in assets under administration year-over-year driven by market performance and positive net flows. The company said it is beginning to see the benefits of greater visibility among individual investors, heightened brand awareness and elevated customer loyalty from retirement plan participants becoming Personal Wealth customers.
In the Workplace Solutions business, the release noted the company continues to achieve strong organic growth, with sales for Empower’s advisor-sold business (plans with under $50 million in assets) being up 35% year-over-year, following a record 2023.
Recent wins in the public plan sector have shown particular growth in 2024. Empower serves state-level plans for 29 of 50 states and in total supports the retirement needs of more than 4.1 million public workers who have invested more than $240 billion in assets across Empower’s government business, as of June 30.
So far this year, Empower announced new and retained client commitments from public plan clients across the country, such as the County of Orange (Calif.) with approximately $2.5 billion in assets and the Kansas Public Employees Retirement System (KPERS) with more than 27,300 plan participants who have saved approximately $1.3 billion in assets.
In addition, Empower announced several public transportation authority commitments, including the Santa Clara Valley Transportation Authority (VTA) based out of San Jose, Calif., New Jersey Transit, Chicago Transit Authority, Southeastern Pennsylvania Transportation Authority and METRO Transit Authority of Harris County. These recommitments encompass approximately 50,000 transit authority plan participants.
In addition, Prudential integration was completed in the second quarter of 2024. Retention targets exceeded and the expected U.S. $180 million pre-tax of run rate cost synergies have been achieved, according to the Great-West Lifeco release.
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