Empower Retirement has entered into a definitive agreement to acquire the recordkeeping business of Fifth Third Bank, National Association, a Cincinnati-based diversified financial services company, the companies announced today.
Under the agreement, Empower will provide recordkeeping and administrative services for 476 retirement plans through approximately 100,000 participants with $6.21 billion in assets, as of Aug. 31.
Fifth Third will continue to serve in a plan-level investment advisory capacity for most of the plans with a continued focus on providing independent fiduciary advisory services, according to a press statement. In addition, the bank’s retirement plan business for institutional clients will focus on its core strength of providing independent fiduciary advisory services and comprehensive investment solutions to help clients grow, manage and protect their assets.
The terms of the agreement were not disclosed. The statement said the transaction is expected to close in the fourth quarter, and that Fifth Third will continue to manage $4.2 billion in plan assets.
Edmund F. Murphy, III, Empower Retirement president and CEO, said Empower and Fifth Third are together taking the next step toward addressing the needs of plan sponsors, their workers and retirees through the combination of expertise, talent and business scale being created. “This is an exciting evolution of the existing 16-year relationship between Empower and Fifth Third. With the addition of these plans to Empower’s platform, we will continue to expand our capabilities for these savers, enhance our financial wellness and advice offerings, and accelerate our value creation for all our stakeholders.”
Empower currently provides recordkeeping services for Fifth Third’s retirement business through its private-label retirement plan unit, Empower Institutional. Because of this existing relationship, the Fifth Third plans will not require conversions, the statement noted.
Greenwood Village, Colo.-based Empower administers $667 billion in assets on behalf of 9.7 million American workers and retirees through approximately 41,000 workplace savings plans.
In August, the company announced it had completed the acquisition of Personal Capital, a registered investment advisor and wealth manager. The deal netted up to $1 billion in enterprise value, composed of $825 million on closing and up to $175 million for planned growth. The Personal Capital platform offers personalized financial advice, financial planning and goal setting, providing insights and tools for plan participants and individual investors.
And on Sept. 8, Empower entered into a definitive agreement to acquire the MassMutual retirement plan business. That deal will increase Empower’s participant base to more than 12.2 million and retirement services recordkeeping assets to about $834 billion administered in about 67,000 workplace savings plans. That transaction also is expected to close in the fourth quarter, pending customary regulatory approvals.