Empower Retirement is set to acquire the retirement plan business of mutual life insurer MassMutual in a reinsurance transaction for a ceding commission of $2.35 billion.
In addition, the balance sheet of the transferred business will be supported by $1 billion of required capital when combined with Empower’s existing US business.
Through this transaction, business written by MassMutual will be reinsured by Great-West Life & Annuity Insurance Company.
Concurrently, MassMutual will retrocede business it reinsures from a cedent, which MassMutual assumed in a previous transaction.
Any New York business will be reinsured by Great-West Life & Annuity Insurance Company of New York.
The MassMutual retirement plan business consists of 26,000 workplace savings plans through which approximately 2.5 million participants have saved $167 billion in assets.
It also includes approximately 2,000 employees affiliated with MassMutual’s retirement plan business.
“With today’s announcement, Empower is taking the next step toward addressing the complex and evolving needs of millions of workers and retirees through the combination of expertise, talent and business scale being created,” said Edmund F. Murphy III, President and Chief Executive Officer of Empower Retirement.
“Together, Empower and MassMutual connect a broad spectrum of strength and experience with a shared focus on the customer. We are excited about the opportunity to reach new customers and serve even more Americans on their journey toward creating a secure retirement.”
“In Empower, we are pleased to have found a strong, long-term home for MassMutual’s retirement plan business, and believe this transaction will greatly benefit our policyowners and customers as we invest in our future growth and accelerate progress on our strategy,” said Roger Crandall, MassMutual Chairman, President and CEO.
“This includes strengthening our leading position in the U.S. protection and accumulation industry by expanding our wealth management and distribution capabilities; investing in our global asset management, insurance and institutional businesses; and delivering a seamless digital experience — all to help millions more secure their future and protect the ones they love.”