Empower to Acquire Prudential’s Full-Service Retirement Business

Empower Retirement and Prudential Financial Inc. announced they have entered into a definitive agreement for Empower to acquire Prudential’s full-service retirement business.

The announcement says the acquisition will add significant expertise, a broader set of capabilities and an expanded product portfolio to Empower’s existing business. The transaction, which is expected to close in the first quarter of 2022 pending customary regulatory approvals, will increase Empower’s participant base to 16.6 million and its retirement services recordkeeping assets to approximately $1.4 trillion administered in approximately 71,000 workplace savings plans.

Empower ranked No. 2 in PLANSPONSOR’s 2020 Recordkeeping Survey by total 401(k) assets.

Prudential’s full-service retirement recordkeeping business comprises more than 4,300 workplace savings plans, through which approximately 4 million plan participants have saved $314 billion in assets. It also includes more than 1,800 employees who provide a suite of retirement recordkeeping and administration services to financial professionals, plan sponsors and participants.

Empower will acquire Prudential’s defined contribution (DC), defined benefit (DB), non-qualified and rollover individual retirement account (IRA) business in addition to its stable value and separate account investment products and platforms.

The company says it expects the acquisition to benefit retirement plan participants by combining two client-focused businesses with retirement expertise on a single state-of-the-art technology platform. The acquisition will allow Empower to expand services to the broadening spectrum of workplace savings plans it now serves, which includes mega, large, midsize and small corporate 401(k) plans; government plans ranging in scale from state-level plans to municipal agencies; not-for-profit 403(b) plans; and collectively bargained Taft-Hartley plans.

Leveraging new capabilities from its 2020 acquisition of Personal Capital, Empower will offer a personalized digital experience that can integrate the elements of any individual’s financial plan to help them better understand their current financial needs through financial advice and goal setting.

Prudential will continue to participate in the institutional and individual retirement plan market, serving retirees, annuitants and employers through its institutional investment products business, as well as through income and investment solutions provided by its individual annuities business and PGIM, its global asset management subsidiary. Following the close of the transaction, Prudential’s retirement business will consist of pension risk transfer, international reinsurance, structured settlements and institutional stable value wrap product lines.

“Empower and Prudential share a commitment to serving the financial needs of working Americans, their advisers and employers. This transaction will create an even stronger service organization at Empower, fueled by technology and the expertise of our deep talent pool,” says Ed Murphy, president and CEO of Empower. “We will continue to leverage our scale and resources to challenge the status quo and be uniquely positioned to serve the retirement and wealth management needs of millions of retirement savers in every phase of their financial journey.”

“Today’s announcement is a significant milestone in Prudential’s transformation and the execution of our strategy to become a higher growth, less market sensitive, more nimble business,” says Prudential Chairman and CEO Charles Lowrey.