Deals and People February 7, 2025

Legal & General to Sell 20% Stake in PRT Business to Japanese Insurer

Meiji Yasuda Life will also acquire all of L&G’s U.S. insurance protection business in a total $2.3 billion transaction.

Reported by

With an eye on continuing to offer security to retirees in pension risk transfer deals, Legal & General Group PLC announced Friday the sale of its U.S. insurance business to Japanese annuity firm Meiji Yasuda Life Insurance Co. in a $2.3 billion deal that includes the firm’s protection business and one fifth of its U.S. PRT business.

Meiji Yasuda will wholly acquire Legal & General’s traditional U.S. insurance business and will take a 20% stake in the company’s U.S. PRT business. In addition, Meiji Yasuda will acquire a 5% stake in Legal & General.

“This is an exciting milestone for the U.S. pension risk transfer business. The strategic partnership with Meiji Yasuda combines the strength and experience of two industry-leading companies to support our continued growth in the U.S. PRT market,” said George Palms, CEO of Legal & General Retirement America, the firm’s U.S. PRT division, in a statement. “This partnership marks a new chapter for our organization, and our priority remains steadfast: to ensure a secure retirement for our annuitants and provide exceptional service to our clients.”

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Approximately 400 million pounds ($497.51 million) from the proceeds of the transaction will be invested in Legal & General’s U.S. PRT business, according to the announcement. The two firms will partner in asset management by outsourcing pension risk transfer and protection assets to Legal & General.

“This strategic partnership brings together two highly complementary global businesses, with a shared ambition for growth, and will enable us to capitalize on the large market opportunities in U.S. Pension Risk Transfer while driving scale and profitability in global asset management,” said Legal & General Group CEO António Simões in a statement.

Insurance firm Nationwide expected the U.S. PRT market exceeded $50 billion in 2024 and projected continued momentum in 2025.

The two firms will also establish a long-term partnership in global private assets, including significant co-investment in Legal & General’s private asset capabilities, which include real estate equity, private credit, infrastructure equity and venture capital.

The transaction is expected to close at the end of 2025, pending regulatory approval. According to a December 2024 report from Legal & General, the firm expects its largest recorded PRT volume in the U.S. and Canada this year. The firm is expected to write 10.5 billion pounds of PRT volume in the U.K. and another 2.1 billion pounds internationally, including the U.S. market.

Headquartered in Tokyo, Meiji Yasuda is the oldest and one of the major life insurance providers in Japan. The company also has insurance operations in the U.S., Poland, Thailand and China, deal materials stated.

Data and Research February 7, 2025

529 Tuition Savings Plans Hit Net Inflows of $3.1B at End of 2024

The tax-advantaged accounts continue to grow in assets year over year.

Reported by

A provision of the SECURE Act 2.0 of 2022 that permits certain assets saved for education to be rolled over into retirement accounts is expected to broaden the appeal of tax-advantaged tuition savings plans in coming years.

College savings plans, known as 529 tuition savings plans, continued to show asset growth and net flows in 2024, with these accounts reaching $3.1 billion in the fourth quarter of 2024, according to recent data from ISS Market Intelligence.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

The inflows represent an increase from Q4 2023 net inflows, which were $2.1 billion, and Q4 2022 net inflows of $1.5 billion.

529 plans accumulate contributions in tax-advantaged accounts that can be invested in and used to pay for the qualified education expenses of the beneficiary. SECURE 2.0 also allows certain assets in a 529 plan maintained for at least 15 years for a designated beneficiary to be rolled over on a tax-free basis to a Roth IRA for the same beneficiary.

The increase in accumulated assets aligns with continued demand for 529 accounts and an increasing number of parents successfully using them for the intended purpose of paying qualified educational expenses, according to data collected by ISS Market Intelligence, which, like PLANSPONSOR, is owned by ISS STOXX.

Student loan debt in the U.S. totaled $1.773 trillion as of January 15, according to the Education Data Initiative, and 529 plans provide an opportunity for families to help their children avoid student debt in the future.

ISS Market Intelligence data found that, as of December 2024, Americans had opened 16.1 million 529 accounts and invested $500 billion in assets in those savings plans. The data also showed that there are $2.3 billion in assets invested in 195,542 Achieving a Better Life Experience accounts. ABLE accounts are tax-advantaged savings accounts that benefit people with disabilities.

“The overall outlook for 529s continue to brighten, and especially with the expansion of qualified expenses to certain types of qualified distributions from 529s to Roth IRAs,” wrote Paul Curley, director of 529 and ABLE research at ISS Market Intelligence, in the report. “As 529s broaden from a product for education financial planning to retirement financial planning in 2024 and continuing into 2025, we expect new positive energy by new stakeholders to drive growth over the next three to five years.”

The five largest 529 savings plans by Q4 2024 assets were:

  1. CollegeAmerica 529 Savings by American Funds: $94.7 billion
  2. New York 529 Direct by Vanguard: $43.9 billion
  3. Vanguard 529 by Vanguard: $37.7 billion
  4. My529 by State of Utah: $25.2 billion
  5. UNIQUE College Investing Plan by Fidelity: $22.7 billion

In addition, the five savings plan program managers with the most Q4 2024 assets were:

  1. Ascensus: $136.6 billion
  2. American Funds: $94.7 billion
  3. TIAA: $59.5 billion
  4. Fidelity: $46.9 billion
  5. State of Utah: $25.2 billion

«