Great-West Financial will acquire the large-plan defined contribution business of J.P. Morgan Asset Management, creating the second-largest U.S. record keeper by participants and tying for second based on assets under administration.
Terms of the deal were not disclosed.
J.P. Morgan Retirement Plan Services is JPMAM's bundled defined contribution plan business, which primarily serves large defined contribution plans. Great-West will gain 200 clients with about 1.9 million participants and $167 billion assets under administration.
On March 20, Great-West Lifeco announced it is combining the retirement businesses of its Great-West Financial and Putnam Investments units to create a single unit with $220 billion of assets under administration for about 5 million participants.
When J.P. Morgan Retirement Plan Services is incorporated into Great-West Financial — likely in the third quarter, pending regulatory approval — the firm will have about 6.8 million participants and $387 billion under administration.
The acquisition will move Great-West Financial into second place from fourth in terms of participants served and into a tie for second place with TIAA-CREF in Pensions & Investments' March 3 record-keeper rankings based on assets under administration from sixth.
Fidelity was first in the latest Pensions & Investments survey with 16.7 million participants and assets of $1.3 trillion as of Sept. 30.
Initially, all three businesses — Great-West Retirement Services, Putnam Investments and J.P. Morgan Retirement Plan Services — will continue to operate as separate entities in their respective headquarters in Greenwood Village, Colo., Boston, and Kansas City, Mo., said Robert L. Reynolds, president and CEO of both Putnam Investments and Great-West Lifeco, in an interview.
Mr. Reynolds will add the responsibilities of president and CEO of Great-West Financial to other Putnam titles in May.
He said he wants to make sure there are “no changes to clients.” He said combining the three will be “seamless” as sales, client services and other support teams will remain in place.
For example, more than 1,000 employees of J.P. Morgan Retirement Plan Services will become Great-West Financial employees.
“The focus is on continuity out of the box, with service enhancements to come over time,” Michael Falcon, managing director and head of retirement, J.P. Morgan Asset Management, said in an interview.
Mr. Falcon will not move to Great-West Financial and will instead continue to oversee the investment management platform for J.P. Morgan Asset Management's small-plan business, which is mostly used by financial advisers.
Great-West Financial is the outsourced record keeper for JPMAM's small-plan unit, Mr. Falcon said.
“In terms of assets, there's no reason to think we'll lose any,” said JPMAM spokeswoman Kristen Chambers in an e-mail.
“Investment decisions are made independent of the record keeper, so we'd expect those decisions to be made in the same way going forward,” Ms. Chambers said. She added that the firm currently manages $110 billion in defined contribution plan assets, a number that firm executives expect to grow.
