Consolidation continues apace in the recordkeeping business, as Empower announced Sept. 29 that it has entered into a definitive agreement with Fifth Third Bank.
The news comes less than a month after Empower announced a deal to acquire MassMutual’s retirement plan business. Additionally, in June Empower announced that it had entered into a definitive agreement to acquire digital wealth management firm Personal Capital in a $1 billion deal.
Under the Fifth Third agreement, Empower will acquire 476 retirement plans, providing recordkeeping and administrative services, according to the announcement. This includes approximately 100,000 participants with $6.21 billion in assets, as of Aug. 31, 2020. Fifth Third will continue to serve in a plan-level investment advisory capacity for most of the plans with a continued focus on providing independent fiduciary advisory services.
While the terms of the agreement were not disclosed, the transaction with Fifth Third is expected to close in the fourth quarter of 2020. At the close of the deal, Fifth Third will continue to manage $4.2 billion in plan assets.
Empower currently provides recordkeeping services for Fifth Third’s retirement business through its private-label retirement plan unit, Empower Institutional. Because of this existing relationship, the Fifth Third plans will not require conversions, the announcement notes.
“This is an exciting evolution of the existing 16-year relationship between Empower and Fifth Third,” stated Empower Retirement President and CEO Edmund F. Murphy, III. “With the addition of these plans to Empower’s platform, we will continue to expand our capabilities for these savers, enhance our financial wellness and advice offerings, and accelerate our value creation for all our stakeholders.”
Empower currently administers $667 billion in assets on behalf of 9.7 million American workers and retirees through approximately 41,000 workplace savings plans, according to the firm.
The MassMutual agreement, which is comprised of a $3.35 billion deal and $167 billion in assets under administration, is also expected to close in the fourth quarter of 2020 pending customary regulatory approvals.
