Empower Retirement has officially acquired MassMutual’s retirement business.
The Denver-based retirement giant today announced the completion of the previously announced acquisition of Massachusetts Mutual Life Insurance Company’s retirement plan business, following the receipt of regulatory approval required by the agreement.
As a result of the acquisition, MassMutual’s retirement plan business transitions to Empower in a reinsurance transaction for a ceding commission of $2.35 billion. In addition, the balance sheet of the transferred business will be supported by $1 billion of required capital when combined with Empower’s existing U.S. business.
MassMutual’s retirement plan business is known in the retirement industry for its robust defined contribution, defined benefit and nonqualified plan offerings; deep commitment to participants, financial professionals and plan sponsors; and innovative solutions to achieve financial wellness.
The MassMutual retirement plan business comprises 26,000 workplace savings plans through which approximately 2.5 million participants have saved $167 billion in assets. It has grown substantially over the past decade, doubling the number of participants served and more than quadrupling assets under management.
The acquisition increases Empower’s participant base to more than 12 million and retirement services recordkeeping assets to approximately $884 billion administered in approximately 67,000 workplace savings plans. Empower is the nation’s second-largest retirement services provider.
“We are excited to welcome new clients and retirement savers to Empower and look forward to the opportunity to serve them on their journey toward creating a secure retirement,” said Edmund F. Murphy III, President and CEO of Empower Retirement. “We are working to make the transition of plans to Empower seamless as we continue to enhance the customer experience by providing a personalized, holistic approach to retirement planning.”
As a result of the deal, more than 1,700 employees who had been affiliated with MassMutual’s retirement plan business will join Empower to provide the full range of support services for financial professionals, plan sponsors and participants.
The combined firm will serve retirement plans sponsored by a broad spectrum of employers. These include mega, large, midsize and small corporate 401k plans; government plans ranging in scale from state-level plans to municipal agencies; not-for-profits such as hospital and religious organization 403b plans; and collectively bargained Taft-Hartley plans. The transaction will also bring MassMutual’s defined benefit business under the umbrella of plans Empower serves.
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