Ascensus announced Wednesday that it has reached an agreement to acquire Mutual of Omaha's 401(k) record management business, which has provided retirement services to Ascensus for more than 20 years.
Under the agreement, Ascensus will assume full responsibility for the insurance company's records management operations, taking over more than 2,300 retirement plans, 65,000 participants and more than $3.9 billion in assets under management. Ascensus did not provide financial terms. The transaction is expected to close in the third quarter.
Ascensus has outsourced services for Mutual of Omaha's retirement division, including record management, participant services, and digital experiences for plan sponsors, third-party administrators, and advisors.
According to the announcement, there will be no changes to plans for the web and service experience for sponsors and participants, as users are already using the company's account services via the Ascensus portal. However, Ascensus noted that participants will have access to additional services such as Financial Finesse Essentials virtual coaching and planning tools.
“As a customer-focused company, we have conducted a thorough strategic review of our 401(k) business and believe that moving to Ascensus is in the best interest of our customers and our company,” said Stacey Scholz, executive vice president of Mutual of Omaha. I made the decision.” In a statement.
The move signals continued consolidation of record holders in the U.S. amid fee pressures and attempts by larger companies to scale up further. An estimated 39 providers account for 97% of the total DC market, according to Plan Sponsor's analysis of 2023 Investment Company Factbook data. PLANSPONSOR is a sister publication of his PLANADVISER, and as of the latest data, his wealth ranks him 10th among record holders with a net worth of $151.8 billion.
“We are honored that Mutual of Omaha, a company we have admired through our long-standing partnership, has entrusted Ascensus with the retirement savings futures of its valued customers and savers,” Ascensus President Nick Good said in a statement. Stated. “Our clients and plan participants can look forward to a very easy transition and access to an enhanced suite of solutions and capabilities.”
Mr. Good was appointed president of the company in September 2023, taking over from David Musto, who currently serves as the company's CEO. The Drescher, Pennsylvania-based company announced in February 2024 that it would reorganize its retirement business into four segments: Core Retirement, Partner Solutions, Small Business, and Retirement Products and Solutions.
The company managed 154,000 retirement plans serving approximately 5 million retirement savers as of December 31, 2023. Add in other tax-advantaged services, such as the 529 Education Savings Program, and the company partners with more than 14 million people.
