Ascensus to Acquire Mutual of Omaha’s 401(k) Business
Retirement services provider will add $3.9B in assets after providing outsourced recordkeeping to retirement division for years.
Ascensus announced Wednesday it had reached an agreement to acquire Mutual of Omaha’s 401(k) recordkeeping business after providing outsourced retirement services to the firm for more than 20 years.
With the deal, Ascensus will take on full responsibility of the insurance firm’s recordkeeping business, taking over 2,300 retirement plans, 65,000 participants and more than $3.9 billion in assets under administration. Ascensus did not provide financial terms; the deal is expected to close in this year’s third quarter.
Ascensus has been an outsourced provider of services for Mutual of Omaha’s retirement division including recordkeeping, participant services, and digital experiences for plan sponsors, third party administrators, and advisers.
In part due to that relationship, there will be no change to plan sponsor and participant web or service experiences, according to the announcement, as users already go through the Ascensus portal and use the firm’s account services already. Participants will, however, get access to additional services, Ascensus noted, including Financial Finesse Essentials virtual coaching and planning tools.
“As a customer-focused company, we determined after a thorough strategic review of our 401(k) business that transitioning it to Ascensus would be in the best interest of our customers and our company,” Mutual of Omaha’s Executive Vice President Stacy Scholtz said in a statement.
The move signals that recordkeeper consolidation continues in the U.S. amid fee pressures and attempts by the largest to gain further scale. An estimated 39 providers account for 97% of the overall DC market according to a PLANSPONSOR analysis of 2023 Investment Company Fact Book data. PLANSPONSOR is a sister publication of PLANADVISER, and also ranks Ascensus tenth among recordkeepers by assets at $151.8 billion as of the latest data.
“We are honored that Mutual of Omaha, a company we have respected throughout our many years of partnership, has entrusted Ascensus with the retirement savings futures of their valued clients and savers,” Ascensus President Nick Good said in a statement. “Our clients and plan participants can look forward to a very straightforward transition and access to an enhanced suite of solutions and capabilities.”
Good was named president of the firm in September 2023, taking the president role from David Musto, who remains CEO of the firm. In February 2024 the Dresher, Pennsylvania-based firm announced a restructuring to its retirement business into four segments: core retirement, partner solutions, small business, and retirement products and solutions.
The firm administered 154,000 retirement plans serving nearly five million retirement savers as of December 31, 2023; when adding other tax-advantaged offerings such as 529 education saving programs, the firm works with more than 14 million people.