Great-West Acquires J.P. Morgan Retirement Plan Services

The acquisition was of interest to Great-West because over the years, J.P. Morgan has built a great business in the large-plan market, Robert L. Reynolds, president and chief executive officer of Great-West Lifeco U.S., tells PLANSPONSOR. “This jump starts the whole business, bringing us scale and a client base to truly build a world-class retirement plan service.”

Reynolds also notes the transaction is part of Great-West’s commitment to expand its “expertise, talent and business scale” in the retirement plan market. Upon the close of the deal, Great-West Financial’s retirement services recordkeeping assets will increase to $387 billion and its participant base to 6.8 million, making it second only to Fidelity Investments in both categories in the DC recordkeeping business, according to the most recent PLANSPONSOR Recordkeeping Survey.

J.P. Morgan will continue to serve small retirement plans through its Retirement Link unit, which uses Great-West’s FASCore as its recordkeeping platform (see “J.P. Morgan Announces Recordkeeping Solution“).

“We are very excited about the transaction,” Michael Falcon, head of retirement at J.P. Morgan Asset Management, tells PLANSPONSOR. He calls the deal “very complementary,” as Great-West has “an existing expertise in serving large plans” along with extensive technological capabilities. It will also enable J.P. Morgan to continue to concentrate “on our priority and focus: investments,” he says.

As JP Morgan was a client of the FASCore platform, and will remain a client, the company had a lot of familiarity and first-hand knowledge of the platform, Reynolds notes.

Client Service  

Based in Overland Park, Kansas, J.P. Morgan Retirement Plan Services has more than 1,000 personnel including sales staff, consultant relations, relationship managers and client service specialists. The employees of J.P. Morgan Retirement Plan Services will become employees of Great-West, with service to existing customers continuing seamlessly, Reynolds and Falcon note. David Musto, CEO of J.P. Morgan Retirement Plan Services, will report directly to Reynolds, the executives say.

Musto will work alongside Charles P. Nelson, president, Retirement Services at Great-West Financial and Edmund F. Murphy III, head of defined contribution at Putnam Investments, according to Reynolds. The first job of these “three very talented people” is to continue to serve the books of business they have, and over time the three executives will work to create a plan to provide best in class service to all plans and participants, he adds.

Although FASCore is the platform for the small recordkeeping clients of JP Morgan, it is not the platform for the large-market clients, so there will need to be conversions to Great-West’s FASCore recordkeeping platform, Reynolds says, though no timeline was given.

“We selected Great-West for continuity and the commitment [the firm] has made to bring the business on wholesale, with a seamless continuation of the back office to minimize disruption” for clients; Falcon says.

The deal is expected to close in the third quarter, pending regulatory approval. Neither firm disclosed terms of the transaction.

It comes on the heels of Great-West’s announcement last month that it will combine the retirement business of Putnam Investments with Great-West Financial and that Robert L. Reynolds, was named President and Chief Executive Officer of Great-West Lifeco U.S., the holding company that owns Great-West Financial and Putnam Investments (see “Great-West, Putnam to Combine Retirement Businesses”). The addition of the JP Morgan book of business to those of Great-West and Putnam will allow participants to get the best from all three platforms, Reynolds says.