Empower Retirement to acquire retirement plan business of MassMutual

Empower Retirement will acquire the retirement plan business of Massachusetts Mutual Life Insurance Company (MassMutual) in a reinsurance transaction for a ceding commission of $2.35 billion.

The acquisition will capitalize on the expertise of the two firms to offer technological excellence and deep product capabilities, and generate scale to the benefit of participants in the retirement plans and their employers.

Empower Retirement said that the balance sheet of the transferred business will be backed by $1 billion of required capital when combined with its existing US business.

The MassMutual retirement plan business is made up of 26,000 workplace savings plans through which nearly 2.5 million participants are said to have saved $167 billion in assets. It also includes around 2,000 employees affiliated with MassMutual’s retirement plan business who offer a full variety of support services for financial professionals, plan sponsors, and participants.

Edmund F. Murphy III – President and CEO of Empower Retirement said: “With today’s announcement, Empower is taking the next step toward addressing the complex and evolving needs of millions of workers and retirees through the combination of expertise, talent and business scale being created.

“Together, Empower and MassMutual connect a broad spectrum of strength and experience with a shared focus on the customer. We are excited about the opportunity to reach new customers and serve even more Americans on their journey toward creating a secure retirement.”

Empower Retirement to acquire retirement plan business of MassMutual

The transaction will help increase the participant base of Empower Retirement to over 12.2 million and retirement services recordkeeping assets to around $834 billion administered in nearly 67,000 workplace savings plans.

Roger Crandall – MassMutual Chairman, President and CEO said: “In Empower, we are pleased to have found a strong, long-term home for MassMutual’s retirement plan business, and believe this transaction will greatly benefit our policyowners and customers as we invest in our future growth and accelerate progress on our strategy.”

“This includes strengthening our leading position in the U.S. protection and accumulation industry by expanding our wealth management and distribution capabilities; investing in our global asset management, insurance and institutional businesses; and delivering a seamless digital experience — all to help millions more secure their future and protect the ones they love.”

The deal, which is likely to close in Q4 2020 is subject to customary regulatory approvals.