USI Insurance Services has acquired the employee benefits business of Benefit Controls of the Carolinas Inc., its first North Carolina acquisition. An employee benefits consulting firm, Benefit Controls of the Carolinas designs and manages employee benefits and wellness solutions, and provides human resources (HR) consulting for companies of all sizes.
The employee benefits unit and its employees will remain in Benefit Controls of the Carolinas’ Charlotte, North Carolina, location. Terms of the transaction were not disclosed.
W. Scott Gantt, president of Benefit Controls of the Carolinas, says the firm’s clients will benefit from USI’s national market leverage and expanded suite of products and services, while still enjoying high-touch, specialized customer care.
James W. Dunn, regional CEO for the USI Southeast region, cites Benefit Controls of the Carolinas for the exceptional quality of its employee benefits, professional advice and guidance, and its customer service.
NEXT: LCG Associates expands footprint with Seattle location.
LCG Associates Inc. has opened a new office in Seattle, which will serve as LCG’s West Coast hub. David R. Emerson, senior vice president and principal, will lead the expansion.
Emerson, who has nearly 20 years of investment experience, has been with LCG for 12 years. His responsibilities include lead client relationships with endowments, foundations, family offices and utilities. Emerson conducts capital market and asset class research as well as investment manager due diligence. He is a member of the risk management and investment committees. Emerson leads the teams focused on environment, social and governance (ESG) and socially responsible investing (SRI), as well as nuclear decommissioning trusts.
“We are thrilled about being a member of the Seattle community and to have Dave leading our expansion. We have worked with clients on the West Coast for over 30 years,” says Edward Johnson, president and CEO, adding that the Seattle location will meet the needs of current and future clients.
Emerson holds a bachelor’s degree in political science from the University of Michigan and a master’s degree in business administration in finance from the Smith School of Business at the University of Maryland.
LCG Associates is a national, employee-owned institutional investment consulting firm.
“Scale is a very important part of the economics that drive this business,” says Transamerica's Kent Callahan, telling PLANSPONSOR the move to take on Mercer’s DC administration business is all about scale and superior service.
A deal announced Friday to transition Mercer’s defined
contribution (DC) plan administration business to Transamerica’s retirement platform
will drive the migration of more than 900,000 participants and adds further momentum
to a streak of recordkeeper consolidations.
Kent Callahan, president and CEO of Transamerica’s
Investments and Retirement Division, agrees that major industry consolidations show
little sign of slowing heading into the final quarter of 2015. Speaking with
PLANSPONSOR shortly after Transamerica parent company Aegon announced an agreement
with Mercer HR Services to acquire Mercer’s U.S. defined contribution
administration book of business, Callahan said the next three to five years are
going to see merger and acquisition activity in the retirement plan services space
“shift from second to fifth gear.”
Under the terms of the deal, beyond taking on 917,000
additional participants currently serviced by Mercer, Transamerica will become “the
preferred defined contribution recordkeeping provider for Mercer’s total
benefit outsourcing and total retirement outsourcing clients.”
That portion of Mercer’s business is not changing hands,
explained Sandy McCarthy, Mercer U.S. benefits administration leader. This
means the relationship management team at Mercer is “still going to play the
significant role in leading the total benefit outsourcing [TBO] and total
retirement outsourcing [TRO] relationships, and in connecting them to the DC
capabilities at Transamerica.”
McCarthy told PLANSPONSOR, “We
see both sides of the agreement playing out quite nicely. We will continue to
invest in our defined benefit [DB] administration and in our health benefit
administration business, while Transamerica will continue its own fantastic
investment on the DC admin side.”
Both McCarthy and Callahan said there will be a lot of
opportunity for integration between Mercer TBO and TRO programs and the Transamerica
retirement platform. They expect the deal to close by the start of 2016, and
that Transamerica will offer employment to the Mercer staffers servicing the
transitioning book of business. From the client perspective, rollout will begin
when the deal closes and will be carefully executed, Callahan said.
NEXT: What clients can
expect
As plans come onto the Transamerica platform, Callahan said
plan sponsors will be introduced to new phone-based retirement counselors, advanced
mobile account management capabilities, and the company’s individualized
retirement planning system, called OnTrack.
“We recognize that clients within this Mercer business have a
decision to make,” Callahan noted. “We are fully confident that after having a
chance to tell our story and demonstrate our capabilities, we will keep a great
deal of these plans and participants. We hope to keep all of them.”
Callahan noted the firm will have “no issue taking on this
large group of participants quickly and seamlessly.”
“Another point to make is that, we have had very strong growth in
new sales in the last 20 months, at 14% annualized, so it demonstrates that we are able to bring
on business right now at a rapid rate while maintaining very high quality,” he suggested.
“We have demonstrated that already, no question.”
Importantly, current and future clients of Mercer’s TRO and
TBO businesses will still have the opportunity to work with other recordkeeping
providers, should they so choose. According to Callahan, being the preferred DC
administration provider for Mercer TBO and TRO “simply means Mercer will hold
up Transamerica and say to clients, ‘We have integrated this system and we
really stand by Transamerica on this, so they are likely to be a good choice
for you as our strategic partner.’”
Callahan also pointed to expanded opportunity for
Transamerica in the individual retirement account (IRA) services domain.
“We’re going to be able to help these 917,000 participants
get even better prepared for retirement through the additional tools and
services we can bring to the table,” he explained. “This includes the personal
retirement solutions model and the rollover IRA retirement planning counselors
program we offer. It’s another phone-based team that we believe has done an unbelievably
good job of improving our clients’ retirement readiness in that market.”
Callahan suggested Transamerica is “already very well positioned
for the post-fiduciary redefinition environment,” from the IRA rollover perspective. He
said the firm is fully prepared for final rule language to emerge by March or
April 2016, and for the rules to be effective by the end of 2016. “That’s our
timeline and we’ll be operational whenever we need to be.”
“It’s important to note that our platform is built on open
architecture and so is Mercer’s platform, so we feel well prepared,” Callahan
concluded. “And we have a tremendous IRA team that will continue to serve
clients very effectively in the post-rule change environment. We actually think
the DOL regulations could present a competitive advantage for Transamerica and
Mercer as well.”
In an internal Mercer client memo obtained by PLANSPONSOR,
the firm presents the deal to clients as “a strategic alliance where
Transamerica Retirement Solutions LLC will acquire our DC book of business and
also become our preferred DC administration provider for our TBO and TRO
offerings.”
Mercer tells clients, in the near term, “we anticipate no
changes to teams, the participant experience or the way we administer plans …
Once the transaction is closed we will work with clients and Transamerica to
develop conversion plans that ensure a smooth process.”
Mercer expects client conversions to be completed within 24
months, and because it anticipates clients “will continue to work with the same
teams out of the same location they have today,” the firm says it is confident
that the services provided by Transamerica will be consistent with Mercer’s.
The motivation for offloading the DC administration business
is framed this way: “We’ve delivered top-tier DC administration services for
over 20 years. However, after an extensive evaluation of the retirement market
and our existing DC administration services, we recognized that the marketplace
has evolved to favor firms that offer full-service DC asset management and plan
administration solutions. After careful internal and external analysis, we have
decided to form a strategic alliance with … one of the fastest growing
retirement plan recordkeeping firms in the U.S.”
Mercer cites redoubled commitment to offering integrated
total benefits for clients and prospects.
“It will enable us to reinvest in our defined benefit and
health benefit businesses, thereby enabling growth and strengthening our
overall client offering,” the memo explains. “For our TBO and TRO clients, the
online DC administration experience and resources available through
Transamerica will be embedded into Mercer’s participant website, creating a
seamless user experience.”
For DC-only institutional clients, mid-market and
Taft-Hartley clients, once they convert to Transamerica’s platform, their
participants will go directly to Transamerica’s participant portal and call
center to manage their plan, the memo says.