Empower Retirement said Wednesday it agreed to acquire Prudential Investments’ full-service retirement business in a $3.55 billion deal, as the retirement plan administrator bolsters its portfolio of clients and accelerates its expansion. With this transaction, which includes 4,300 retirement plans and 4 million participants, Empower now has 16 million clients across all major markets, including government, not-for-profit and profit businesses, said Ed Murphy, chief executive officer of Empower. The acquisition includes defined contribution, defined benefit, nonqualified and rollover individual retirement accounts, as well as Prudential’s
stable value and separate account investment products.
“We are committed to helping Americans save for retirement,” he said in an interview with MarketWatch. “There are opportunities for us to expand and grow and build on that mission.” Prudential’s business was a “great fit” for Empower, he said. “We think we can deliver tremendous value to our participants, plan sponsors and now the 16 million people relying on us.” Workplace plans are a crucial way for Americans to save for retirement, even though only roughly half of Americans have access to one. Employer-sponsored plans, such as those Empower manages, allow workers to automatically and seamlessly put money away for their futures through their paychecks. State governments are attempting to mimic that structure with their own state-sponsored retirement plans, using investment vehicles similar to IRAs. Empower is familiar with acquisitions. Last year, the company bought MassMutual’s retirement business in 2020. In 2014, Great-West and Putnam’s acquisition of JP Morgan’s retirement business created Empower. Empower also purchased online financial planning firm Personal Capital in a $1 billion deal in 2020, and said it would use that technology to help its new retirement participants through the Prudential transaction. The deal is expected to close in the first quarter of 2022, at which point Prudential retirement plan participants will still access their accounts as they currently are. Closer to the transition, Empower will share a schedule for moving participants over to their platforms, but there will be “no disruption,” Murphy said.