A big announcement at the latter part of last week as Voya Financial announced Friday that it has entered into an agreement to acquire nonqualified deferred comp provider and consultant Pen-Cal Administrators.
Pen-Cal will become part of Voya’s Retirement business operating unit. Terms of the transaction were not disclosed.
“As the financial wellness needs of Americans continue to evolve, innovative compensation benefits, such as nonqualified retirement plans, are becoming an increasingly important way for employers to attract and reward key members of their workforce,” Charlie Nelson, CEO of Retirement and Employee Benefits for Voya Financial, said in a statement.
He referred to the acquisition as an example of the investments Voya is making to facilitate growth and expand the set of solutions to enhance “the client experience and improve financial outcomes for plan participants. The integration of these capabilities will also provide our plan advisor partners with the tools and resources they need to demonstrate greater value to their clients.”
Through the deal, nonqualified services will be available across all of Voya’s 401k 403b and 457 plan markets and offered as an integrated solution when Voya is administering an employer’s core defined contribution retirement plan.
“We have seen the demand for nonqualified deferred compensation plans increase from large employers as a result of recent tax reform,” Kirk Penland, CEO of Pen-Cal, added. “We also expect interest in these plans to gain further momentum as small and mid-market companies more thoroughly understand the impact of tax reform to both their company and their key executives.”
Employer-sponsored nonqualified deferred compensation plans allow key executives and other select employees to supplement their savings in qualified retirement plans by setting aside a portion of their income on a tax-deferred basis until a future date. A primary goal of many plans is to recruit, reward and retain key leaders and top talent.