Assets jump 9.9% to new high point at $5.56 trillion · PDF fileAssets jump 9.9% to new high...
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Assets jump 9.9% to new high point at $5.56 trillion
Consolidation shrinksfield of players, but assets
continue to increase
By ROBERT STEYER
A ssets of defined contribution
record keepers surpassed $5.5
trillion for the year ended Sept.
30, a record high, according to
the latest Pensions & Investments survey of
the largest record keepers.
Record-keeping assets for firms
responding to the P&I survey jumped
9.9% to $5.56 trillion, up from $5.06 trillion
for the year ended Sept. 30, 2013. The
number of participants among survey
respondents rose to 90.56 million, up 5.8%
from 85.57 million.
Fifty companies participated in the lat-
est survey vs. 52 for the previous survey
and 56 in the survey ended Sept. 30, 2012,
when total assets were $4.45 trillion.
The record-keeping industry reached
the new asset high point with fewer
major players thanks to a series of con-
solidations in recent years. The biggest
deal involved the establishment of
Empower Retirement, Greenwood
Stanley Rowin
MORE TO COME: Edmund Murphy III said new hires in the pipeline will ensure continued growth for Empower.
March 9, 2015
S P E C I A L R E P O R T
DC RECORD KEEPERSDC RECORD KEEPERS
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March 9, 2015
The largest DC record keepers U.S. DC plan assets under record keeping, in millions, as of Sept. 30.
RANKED BY ASSETS UNDER RECORD KEEPING
Rank Record keeper Assets
RANKED BY NUMBER OF PARTICIPANTS
Rank Record keeper Participants
© Entire Contents copyright by Crain Communications Inc. All rights reserved.
1 Fidelity Investments $1,406,491
2 TIAA-CREF $422,407
3 Empower Retirement $407,466
4 Aon Hewitt1 $393,872
5 Vanguard Group $378,862
6 Voya Financial $346,321
7 Wells Fargo $214,000
8 BofA Merrill Lynch $165,672
9 T. Rowe Price Group $147,791
10 Principal Financial $147,615
11 Xerox $143,001
12 Prudential Financial $130,555
13 Transamerica Ret. Solutions $119,395
14 MassMutual Financial $119,127
15 Charles Schwab $110,139
16 Mercer $96,996
17 Nationwide Financial $96,286
18 John Hancock Financial $84,048
19 VALIC $66,442
20 Ascensus $55,810
21 ICMA Retirement $53,231
22 Lincoln Financial $51,314
23 ADP Retirement $50,307
24 New York Life Inv. Mgmt. $43,509
25 Alliance Benefit Group $32,350
26 Newport Group $31,104
27 American United Life $28,808
28 Milliman $28,547
29 BMO Retirement $27,456
30 AXA Equitable Life $25,145
31 Paychex $22,000
32 Alerus Financial $16,400
33 Standard Insurance $15,948
34 Securian Retirement $12,864
35 BB&T Retirement $8,802
36 DailyAccess $7,427
37 Ameritas Retirement $6,921
38 Security Benefit $6,728
39 EPIC Advisors $6,566
40 BOK Financial $5,652
41 USI Consulting Group $4,722
42 SunTrust Banks $4,541
43 Associated Inst’l Trust $4,091
44 NADART $3,212
45 Insperity $2,535
46 Lincoln Trust $2,281
47 MidAmerica Admin. & Ret. $1,019
48 Correll $991
49 Reed-Ramsey $290
50 GAMCO Investors $41
Total $5,557,0981As of Dec. 31.
1 Fidelity Investments 17,572,222
2 Empower Retirement 7,121,212
3 Aon Hewitt1 5,736,312
4 TIAA-CREF 5,613,287
5 Voya Financial 4,883,671
6 Principal Financial 3,980,955
7 Vanguard Group 3,785,464
8 BofA Merrill Lynch 3,374,523
9 Transamerica Ret. Solutions 3,330,212
10 Wells Fargo 3,010,381
11 MassMutual Financial 2,524,048
12 Xerox 2,477,254
13 Prudential Financial 2,438,657
14 Nationwide Financial 2,198,534
15 VALIC 1,971,900
16 T. Rowe Price Group 1,923,037
17 Ascensus 1,785,258
18 John Hancock Financial 1,680,173
19 ADP Retirement 1,501,806
20 Lincoln Financial 1,418,060
21 Mercer 1,282,536
22 ICMA Retirement 1,139,837
23 Charles Schwab 1,136,894
24 New York Life Inv. Mgmt. 1,078,647
25 AXA Equitable Life 847,454
26 Paychex 740,000
27 BMO Retirement 733,399
28 Alliance Benefit Group 719,903
29 Milliman 664,109
30 American United Life 624,302
31 MidAmerica Admin. & Ret. 572,556
32 Standard Insurance 329,483
33 Newport Group 314,629
34 Securian Retirement 281,602
35 Alerus Financial 268,877
36 Security Benefit 218,820
37 USI Consulting Group 213,095
38 BB&T Retirement 173,601
39 DailyAccess 140,446
40 EPIC Advisors 109,609
41 Ameritas Retirement 108,496
42 NADART 98,499
43 Insperity 93,506
44 SunTrust Banks 82,471
45 BOK Financial 81,446
46 Associated Inst’l Trust 74,054
47 Correll 61,000
48 Lincoln Trust 30,532
49 Reed-Ramsey 13,800
50 GAMCO Investors 266
Total 90,560,8351As of Dec. 31.
Village, Colo., created by the combina-
tion of Great-West Retirement Services,
the retirement business of Putnam
Investments and J.P. Morgan Retirement
Plan Services.
Empower placed third in assets with
$407.5 billion for the 12 months ended
Sept. 30. In the previous P&I survey,
Great-West was sixth in assets, while J.P.
Morgan was eighth in assets. Putnam
Investments declined to participate.
Some transactions didn’t close before
the Sept. 30 deadline or were announced
after the deadline. One of those was the
December 2014 announcement that John
Hancock Retirement Plan Services,
Boston, would acquire New York Life
Retirement Plan Services, Westwood,
Mass. The transaction — which excludes
New York Life’s stable value business —
is expected to close during the first half
of 2015. In the current survey, John
Hancock ranked 18th with $84 billion in
assets and New York Life placed 24th
with $43.5 billion in assets.
Consolidation will continue among
record keepers, especially those catering
to DC plans with assets from $100 million
to $500 million, said Robyn Credico,
Arlington, Va.-based defined contribu-
tion practice leader for Towers Watson &
Co. “There’s not much more room for
consolidation for large plan-sponsor
record keepers,” she said.
Good news or bad newsFor DC plan executives, the consolida-
tion trend can offer good news or bad
news, she said. Reduced competition
among record keepers could make it
tougher for plans to negotiate better
prices and services, she said. Other draw-
backs could be reduced flexibility for
investment options and services as
record keepers standardize their offer-
ings, or concerns by participants that a
change in record keepers represents a
takeaway of services and options.
On the positive side for sponsors, she
said consolidation could lead to
improvements such as enhanced web-
based displays for participants to moni-
tor their savings performance and goals
and better service from a larger record
keeper making a commitment to staying
in the business.
Empower Retirement is still inte-
grating elements of the three record-
keeping units now under one roof and
brand name, said Edmund Murphy III,
Empower president of retirement
services.
The former Great-West and Putnam
record-keeping units used the same plat-
form, but J.P. Morgan’s was different.
Integrating the J.P. Morgan system into
the fold starts in April and will continue
through 2016. The integration is being
done this way due to different sponsor
asset sizes, different sponsor plan com-
plexities and other sponsor-related
issues that make difficult an all-at-once
integration, he said.
Empower Retirement also will inte-
grate the respective record-keeping
units’ interfaces — what web-based
services participants see and use on their
computers and mobile devices — by the
first quarter of 2016.
Mr. Murphy predicted growth in 2015
thanks to some new contracts that have
been announced or are pending. One
new contract is the Washington State
Department of Retirement Systems,
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March 9, 2015
RANKED BY NUMBER OF SPONSORS
Rank Record keeper Sponsors Rank Record keeper Sponsors
1 Paychex 67,000
2 ADP Retirement 46,773
3 Voya Financial 46,227
4 John Hancock Financial 45,072
5 Ascensus 44,377
6 Nationwide Financial 39,219
7 BofA Merrill Lynch 34,483
8 Principal Financial 34,101
9 MassMutual Financial 32,658
10 Empower Retirement 31,734
11 AXA Equitable Life 29,082
12 Fidelity Investments 28,757
13 Lincoln Financial 28,401
14 Security Benefit 27,407
15 VALIC 25,874
16 TIAA-CREF 24,545
17 Transamerica Ret. Solutions 23,049
18 Alliance Benefit Group 12,197
19 American United Life 9,829
20 ICMA Retirement 7,024
21 Alerus Financial 4,222
22 Vanguard Group 3,933
23 Wells Fargo 3,731
24 T. Rowe Price Group 3,530
25 Prudential Financial 3,380
26 Ameritas Retirement 3,140
27 Insperity 3,057
28 Standard Insurance 2,972
29 Securian Retirement 2,359
30 Lincoln Trust 2,058
31 NADART 1,956
32 Newport Group 1,887
33 EPIC Advisors 1,723
34 New York Life Inv. Mgmt. 1,584
35 MidAmerica Admin. & Ret. 1,532
36 DailyAccess 1,387
37 BB&T Retirement 1,232
38 Correll 1,067
39 Charles Schwab 954
40 Milliman 848
41 SunTrust Banks 812
42 BMO Retirement 706
43 Associated Inst’l Trust 593
44 USI Consulting Group 464
45 BOK Financial 447
46 Aon Hewitt1 428
47 Mercer 405
48 Xerox 167
49 Reed-Ramsey 152
50 GAMCO Investors 6
Total 688,5411As of Dec. 31.
Olympia, for its deferred compensation
program and for three other defined
contribution plans whose investments
are overseen by the $103.6 billion
Washington State Investment Board,
Olympia.
The Washington hire was announced
in January and contracts take effect in
October. Empower Retirement has been
the record keeper for the $3.5 billion
deferred compensation plan; it will
replace ICMA-RC as record keeper for
the other DC plans with aggregate assets
of $10.7 billion.
In November, Intuit Inc., Mountain
View, Calif., announced that Empower
Retirement would become record keep-
er for its $1.2 billion, replacing Fidelity
Investments.
Despite Empower’s stronger pres-
ence, Fidelity Investments, Boston,
remained the asset leader by a wide
margin. Fidelity’s $1.41 trillion in
record-keeping assets represented an
11% gain from the previous survey
period.
Fidelity’s performance was aided by
growth in the largest-sponsor markets as
well as among startups, said Steve
Patterson, executive vice president for
sales, workplace investing. Mr. Patterson
said Fidelity added $42 billion in new
record-keeping business during 2014,
while retaining more than 99% of existing
record-keeping assets.
Although Mr. Patterson didn’t provide
a forecast for 2015, his company picked
up a major client in American Airlines
Inc., Fort Worth, Texas. The five-year
agreement, to take effect in mid-2015,
was announced in October.
Fidelity was the record keeper for US
Airways Inc., which merged with
American. J.P. Morgan Retirement Plan
Services (now Empower Retirement) has
been American’s record keeper. When
Fidelity assumes responsibility for the
combined plans, it will administer aggre-
gate assets of about $14 billion and serve
approximately 120,000 participants.
Fidelity didn’t acquire any record
keepers. Neither did TIAA-CREF, New
York, which again placed second in
assets with $422.4 billion, up 8.9% from
$388 billion.
TIAA-CREF benefitted from the con-
tinuing consolidation of record keepers
for 403(b) plans among colleges and
universities, said Edward Moslander,
senior managing director and head of
TIAA-CREF’s institutional client serv-
ice organization.
Prompted by changes in Internal
Revenue Service requiring more fidu-
ciary responsibility for 403(b) plans, a
university that once might have had
five record keepers now has one or two,
he said.
The pace of consolidations “ebbs and
flows,” Mr. Moslander said. “There’s a
medium pace right now. Next year, it’s my
gut feeling there will be more consolida-
tions.”
Other growth sources for TIAA-CREF
include 457(b) deferred compensation
plans and the defined contribution com-
ponents of hybrid plans in the public
sector, he said.
Other major playersAmong the other largest record keep-
ers ranked by assets:
�Aon Hewitt, Lincolnshire, Ill., placed
fourth vs. third in the previous survey, as
assets rose 9.1% to $393.9 billion. Unlike
other companies in the survey, Aon
Hewitt’s data is based on the calendar
year rather than the 12 months ended
Sept. 30;
�Vanguard Group, Malvern, Pa.,
placed fifth vs. fourth in the year-ago sur-
vey as assets rose 11.7% to $378.9 billion;
�Voya Financial Inc., New York,
slipped to sixth from fifth on assets of
$346.3 billion, up 6.4%. Voya was former-
ly known as ING U.S. Retirement;
�Wells Fargo Institutional Retirement
and Trust, Charlotte, N.C., held onto sev-
enth place with $214 billion, a gain of
11.1%;
�Bank of America Merrill Lynch,
Boston, moved to eighth place from ninth
on the strength of a 12% increase to
$165.7 billion from $147.9 million;
�T. Rowe Price Inc., Baltimore, rose to
ninth from 11th with a 2.4% gain to
$147.8 million from $144.3 million;
�Principal Financial Group Inc., Des
Moines, Iowa, advanced to 10th from
12th, with assets of $147.6 billion, a gain
of 10.4%;
�Xerox HR Solutions, Secaucus, N.J.,
dropped to 11th from 10th place, as its
assets slipped 1.5% to $143 billion
from $145.1 million. In the previous
survey, however, Xerox’s asset total
climbed by 51.1%. Xerox was the only
record keeper among the top 25 firms
that posted an asset decline during the
latest survey.
Among record keepers with the
largest number of clients, Paychex Inc.,
Rochester, N.Y., remained the leader
with 67,000 for the latest survey vs.
63,000 in the previous survey. ADP
Retirement Services, Roseland, N,J.,
climbed to second place from sixth,
reporting 46,773 clients vs. 39,414 in the
previous survey. �
March 9, 2015
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