CitiStreet's defined contribution plan clients are sticking with CitiStreet even though the firm is being sold.
On May 2, ING Group, Hartford, Conn., agreed to acquire CitiStreet LLC, Quincy, Mass., for $900 million. CitiStreet, a record keeper to mostly public defined contribution plans, is jointly owned by Citigroup Inc., New York, and State Street Corp., Boston.
Executives of the $1.8 billion 401(k) plan sponsored by South Carolina Retirement Systems, Columbia, are not planning to make any changes. “We did an RFP last year, hiring CitiStreet, and we are not planning to do another,” said Sarah Corbett, assistant director for South Carolina's plan.
Sharon Dickerson, executive director for the $400 million Arkansas Deferred Compensation Fund, Little Rock, said board members were told of the pending deal but aren't very concerned about disruptions. “It will be business as usual. I don't anticipate any changes,” she said.
Bill Damsel, assistant director of defined contribution plans for the $200 million 401(a) plan sponsored by the Ohio Public Employees Retirement System, Columbus, said CitiStreet officials “sent us a letter saying that our members will not be impacted and assured us that service will remain the same. We don't expect any change in our relationship with them.”
Said Phil Lussier, chairman and chief executive officer of CitiStreet: “We've been talking to clients ... and it's been going great. There's been a lot of press on the rumors and speculation, but the message we delivered to our customers is that we will be doing the same thing, with the same people, on the same platform.”
ING executives do not expect to lose CitiStreet clients. “We don't see a disruption in the client base,” said Kathleen Murphy, CEO of ING US Wealth Management. “Citi-Street is communicating with clients and the cultures of both organizations are very complementary.”
ING will keep CitiStreet's Quincy and Boston offices, said Ms. Murphy.
As far as changes to CitiStreet's senior management, Ms. Murphy said plans are still being worked out. “We think very highly of their management team and it's only day three,” she said on May 6, three business days after the deal was announced.
“We have spent time with Phil (Lussier) and Sandy (McCarthy, president of CitiStreet's retirement services division) over the past month or so and think very highly of their leadership,” said Ms. Murphy.
“There's a lot of work to be done and from the organization's perspective, there is a lot of talent here,” said Mr. Lussier.