Why babies born on Oct. 20 hit the jackpot and the financial woes of some government A-listers.
By Cyril Tuohy
Great-West Financial, furthering its reach into the retirement asset management market, announced it will buy the large-market recordkeeping business from JP Morgan Retirement Plan Services.
Transaction terms were not disclosed and the deal is expected to close in the third quarter, the company also said.
In the past two years, Great-West has deepened its penetration into the large-market retirement space.
Last month, Great-West merged its large-plan corporate retirement business with Putnam Investments’ retirement business.
The JP Morgan deal makes Great-West the second-largest retirement services provider in the U.S. with 6.8 million people and its retirement services recordkeeping assets to $387 billion, according to Great-West.
“We’re pleased to unite J.P. Morgan Retirement Plan Services under Great-West Financial to provide customers with an industry-leading service and product offering,” Mitchell T.G. Graye, Great-West president and chief executive officer, said in a news release.
Great-West is quickly building a strategy to take advantage of the growing U.S. retirement marketplace.
Assets held in individual retirement accounts (IRAs), 401(k) plans and other defined contribution plans have grown from $7.1 trillion at the end of 2008 to $11.8 trillion at the end of the third quarter last year, according to statistics from the Investment Company Institute.
With baby boomers retiring, and in light of discussions in Washington about how to help Americans prepare for retirement by funding their own private defined contribution accounts, the future of the retirement services business is robust indeed.
Robert L. Reynolds, president and CEO of Great-West Lifeco U.S., the holding company that owns Great-West Financial and Putnam Investments, said the company was looking to achieve economies of scale in the retirement market.
With the JP Morgan deal, “we are taking a powerful step toward addressing the complex and evolving needs of millions – through the combination of expertise, talent and business scale being created at Great-West Financial,” he said.
Great-West has aggressively expanded the scope of its defined contribution programs by pushing into new geographies and into market segments.
The company has hired managers to build the company’s large-plan presence in new territories along the East Coast, and the company has been more aggressive about selling insurance products through banks.
In addition, the company has added more choices for 401(k) plan participants and for financial advisors selling 403(b) plans.
In a separate announcement in February, the company said Graye would retire in May after 20 years with the Great-West group of companies. The search for a successor is under way.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at email@example.com.
© Entire contents copyright 2014 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.