Ascensus today announced a series of acquisitions on Vanguard’s retirement plan features aimed towards the small business retirement plan market.
According to the announcement, Ascensus has entered into a definitive agreement to acquire Vanguard’s individual 401(k), Multiple participant SEP (Multi-SEP), and SIMPLE individual retirement account (IRA) plans business.
The firm will assume recordkeeping and client servicing for Vanguard’s current line-up of SIMPLE, Multi-SEP, and individual 401(k) plans, and will provide custodial and trustee services, transaction processing, tax reporting, and other services. Plan participants will also retain access to a diverse lineup of Vanguard mutual funds through the Ascensus platform, and Vanguard will continue to offer a one-person SEP IRA for small business owners who do not employ others, said Ascensus in its release.
This agreement will not include Vanguard’s other retirement solutions, the announcement adds.
Already one of the largest administrators of retirement plans, the deal is set to grow Ascensus’ overall retirement plans under administration to nearly 280,000 plans and extend its services to small businesses. SIMPLE, SEP and individual 401(k) plans generally fit the needs of small businesses, either by offering the same opportunities as larger retirement plans or providing a simpler retirement plan solution for employees.
“This acquisition offers small business employers continued access to Vanguard’s investment strength and the technology, expertise, and operational excellence that clients have come to expect from Ascensus,” said Ascensus President Nick Good. “Plan sponsors and participants also will benefit from Ascensus’ commitment to providing flexible and intuitive digital experiences and sophisticated underlying technology, including a modern account management platform optimized for plan administration.”
“The breadth and nuance of small business plan administration increasingly requires deep specialization, and we believe business owners and their employees will be best served by an organization with significant expertise and scale in serving Multi-SEP, SIMPLE IRA, and Individual 401(k) savers,” added Armond Mosley, Principal, head of Vanguard’s Self-Directed business. “We know that clients in these plans will benefit from Ascensus’ longstanding commitment to helping these small business clients meet their retirement objectives.”
The transaction is expected to close in the third quarter of 2024 and the acquired business will operate as part of the Ascensus Retirement line of business.
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