Denver based recordkeeper Empower today announced that its defined contribution plan assets under administration increased 17% year over year to $1.5 trillion as of the end of 2023, and the company now serves a record high 17.9 million retirement plan participants.
“We delivered a strong quarter at Empower, with positive cash flows and strong organic growth across both Workplace Solutions and Personal Wealth.”
Empower President and CEO Edmund F. Murphy III
Empower, a leading provider of retirement and wealth management services, released results as part of a broader quarterly announcement by its parent company, Winnipeg, Canada-based Great-West Lifeco, showing it has entered its 10th year of operations with record earnings achieved through sustained business growth and sales momentum. The firm’s full-year after-tax base earnings in 2023 totaled $749 million.
With this combination of increased scale and growth, Empower’s base earnings have grown by 400% in three years, and its base return on equity in the U.S. has doubled in that same period.
“We delivered a strong quarter at Empower, with positive cash flows and strong organic growth across both Workplace Solutions and Personal Wealth,” said Empower President and CEO Edmund F. Murphy III. “This continues an extended period of expansion that has been our hallmark since Empower was created in 2014.”
Acquisitions and organic growth
Since its inception in 2014, Empower has grown through a combination of strategic acquisitions and organic growth. Today, Empower Workplace Solutions is the second-largest retirement services provider in the U.S. In 2023, the firm expanded its business to create a focused wealth management unit called Empower Personal Wealth, which is composed of its legacy retail unit and the Personal Capital business it acquired in 2020.
This combination has led to a doubling of assets and participants since 2020, resulting in higher market share and material gains in scale. Organic net flows in Empower’s defined contribution business have averaged 4% annually as a percentage of beginning AUA.
“Through our investment, Empower has made a significant commitment to the retirement services market, and our intent is to build on that through continual service to employers, plan participants and the advisors who serve them,” Murphy said.
Empower Personal Wealth’s offering, which combines a powerful and unique digital experience with human advice, has driven annual net inflows of 21% over the last three years (2021-2023). Today, EPW employs over 1,000 advisors serving individual investors from across the wealth spectrum, from the mass affluent to high-net-worth individuals.
“Empower is extending its legacy of being a valued provider of financial services to more people who want financial advice, education and investment expertise,” said Murphy. “The last year proved that we are positioned to grow this business and help our clients seize opportunities to build the financial security they want.”
Prudential integration
In 2022, Empower closed on its acquisition of the full-service retirement business it acquired from Prudential. The integration of that business is currently underway and slated for completion later this year. “Retention levels of the clients, participants and assets from the Prudential business remain high and exceed original expectations,” Murphy said.
The Prudential integration program achieved pretax run-rate cost synergies of $80 million at the end of 2023, with the remainder to be assumed during the first half of 2024.
For more information on Great-West Lifeco’s fourth-quarter 2023 results, see the release on the firm’s website.
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