Empower Finalizes Prudential Retirement Business Integration

Empower noted on an earnings call Thursday that it has completed the integration of the retirement business it acquired from Prudential Financial in April 2022 for $3.55 billion.

On the call, Empower announced that it had completed moving retirement plans from the Prudential recordkeeping system to Empower in a project started in early 2023. Through that integration process, Empower has gained more than 2,500 Prudential clients and 3.6 million participants—while holding on to a 91% retention rate as of March 31. Empower also retained approximately $300 billion in client assets along with additional expertise and technological and product capabilities, according to the announcement.

“This program was focused on elevating the services available to millions of retirement investors, their employers and advisors while asking them to trust us,” said Empower President and Chief Operating Officer Rich Linton in a statement. “Our long history of successfully integrating new businesses has enabled us to complete complex onboarding processes while continuing to deliver for our customers. We are proud of the work we have accomplished on their behalf and the trust that legacy Prudential clients have shown us.” 

Through the acquisition, Empower is leveraging a stronger suite of financial benefits beyond defined contribution plan services, including defined benefit and nonqualified plan offerings, according to the firm, which is a division of Great-West Lifeco Inc. In addition, the company has seen “significant market momentum” in institutional separate accounts, an in-plan investment offering that was strengthened after acquiring Prudential’s business. 

In 2023, Empower reported achieving approximately $7.2 billion in separate account sales.  

Empower also announced record first-quarter earnings of $211 million, achieved as of March 31, with the company now administering more than $1.6 trillion in assets for 18.6 million individuals. This was an earnings increase of $48 million, or 29%, compared to the first quarter of 2023. 

The firm reported that defined contribution assets under administration increased more than 15% year-over-year, while its personal wealth unit’s AUA was up more than 25% over the first quarter of 2023 due to “strong net inflows and positive markets.” 

“The market for retirement services and consumer wealth management remains strong, even in the face of a macroeconomic climate presenting mixed messages,” said Empower President and CEO Edmund F. Murphy III in a statement. “The millions of individuals we serve are staying the course with strong support from their advisors, workplace retirement plans, and employers.” 

Completion of the Prudential acquisition marks another recordkeeper division being folded into Empower since 2014, when the firm was launched with the recordkeeping businesses of Great-West, J.P. Morgan Chase and Putnam Investments. Empower later acquired the recordkeeping businesses of MassMutual, SunTrust and Fifth Third Bank. Empower also acquired the investment and wealth management firm Personal Capital, which last year announced a full integration and renaming to Empower Personal Wealth. 

In total, Empower has integrated $657 billion in client assets onto its platform.