Voya to Acquire OneAmerica’s Retirement Plan Business

Voya Financial Inc. has agreed to acquire OneAmerica Financial Inc.’s retirement plan business as the decades-long consolidation of recordkeepers continues.

The acquisition will add $60 billion in assets under administration to Voya’s Wealth Solutions division, boosting its total AUA to $580 billion, retirement plan coverage to 60,000 and participant pool to 7.9 million. The deal is expected to close on January 1, 2025, subject to closing conditions and regulatory approvals.

The upfront purchase price for the deal was $50 million, according to a presentation on Voya’s website. There is also deferred consideration of up to $160 million payable in the second quarter of 2026, contingent on “plan persistency and transition incentives.” The deal is projected to deliver at least $75 million of pre-tax adjusted operating earnings and over $200 million of net revenue in first year post-closing.

Upon close of the deal, a “majority of the OneAmerica Financial full-service retirement plan employees will be part of the Workplace Solutions team at Voya,” a Voya spokesperson said by email. 

The acquisition will bolster Voya’s emerging and mid-market plan sponsor segments, with $47 billion in assets, according to the announcement. It will also add capabilities such as employee stock ownership plan administration and new distribution partnerships.

The sale does not include OneAmerica’s Institutional Markets business, which includes its Pension Risk Transfer business, according to a spokesperson.

Grant Ellis, managing principal of Ellis Retirement Services, notes that for plan advisers industry moves such as this can create “uncertainty in the minds of clients.” He says that conversations will likely occur whether a client is directly impacted or not.

“As an adviser, if your clients are directly affected by a merger or acquisition, they will be concerned about what that means and what the future holds for them and their employees,” he says. “If they aren’t affected directly, they might be curious about the greater industry implications surrounding mergers and acquisitions and what that might mean for them in the future.”

Fell Swoop

Voya is the sixth-largest DC recordkeeper by assets, and OneAmerica is the 19^th, based on information from the most-recent PLANSPONSOR Recordkeeping Survey. The deal will add approximately 4,000 retirement plans and 1.3 million participants to Voya’s business, according to the survey. PLANSPONSOR is a sister publication of PLANADVISER.

Rob Grubka, CEO of workplace solutions for Voya, notes that the firm has been growing its participant base by about 6% every quarter.

“I look at this as bringing a couple of years of growth in one fell swoop,” he says. “From my perspective it enables us to continue to drive that participant growth that we all know in this business is important to how continue to be efficient and scale. We feel like we’re scaled, but no one is sitting around waiting for us to grow while they stand still.”

Grubka says he expects the migration of the OneAmerica plans to Voya to be “pretty quick and efficient” relative to these types of acquisitions. It will help that OneAmerica uses the same recordkeeping platform provider, FIS Omni, he notes.

Meanwhile, he believes adding OneAmerica’s ESOP program will help Voya provide another option to employers as it presents a holistic benefits solution. Grubka notes the firm’s “large book of business” that it can bring the ESOP to as an option.

OneAmerica is the fifth-largest 403(b) ERISA plan recordkeeper by plans, while Voya is eighth; combined, Voya will now be the third-largest provider of 403(b) ERISA plans at 3,644 plans, overtaking Vanguard (currently No. 3) and Empower (No. 4). Voya already has the largest book of 403(b) non-ERISA plans, with OneAmerica sitting at No. 9.

OneAmerica is also the seventh-largest recordkeeper of governmental 457 plans, and the addition will enhance Voya’s lead in that space by plan assets.

Best Positioned

OneAmerica is a mutual insurance organization that sells to companies and individuals, including in the annuity space. Its retirement plan business is made up of 401(k), 403(b), 457, nonqualified deferred compensation plans and employee stock ownership plans.

“We believe Voya Financial is best positioned to extend our shared mission of working alongside the market’s best financial advisers to achieve financial preparedness for participants and Plan Sponsors,” a OneAmerica spokesperson said via email.

The spokesperson also noted that the sale will “position OneAmerica Financial to be great in the areas the market has said they want and need us to be great. And that’s advancing our growth agenda in our Individual Life and Financial Services, Employee Benefits and Institutional Markets businesses.”

The deal comes as recordkeepers grapple with fee pressure and a host of needs from plan sponsors, plan advisers and consultants. In August, TIAA announced a deal with Accenture to leverage the firm’s technology resources to more quickly innovate and evolve its own recordkeeping services; that deal has some 1,5000 employees in the U.S. and India with an offer to shift to Accenture.

Plan adviser Ellis notes that recordkeeper consolidation can have a positive effect for clients by increasing capabilities as well as decreasing costs.

However, he also notes that M&A can also put a strain on the “systems, personnel and operations of the firms involved.”

“This can lead to a substantial decrease in the customer experience and an increase in client-facing disruptions,” he says. “The transition isn’t always smooth, and during that transition process, the plan sponsor often bears the burden of a poor integration plan.”

Voya’s Grubka, who oversees the company’s businesses across wealth and health in the workplace, believes its still “early innings” in terms of connecting all benefits in one place. But ultimately, he believes that strategy will lead to growth in a way that is “efficient and effective.”

“We’ve got a much broader product portfolio now to go to market and differentiate that experience and the outcomes for an employee,” he says. “How it’s operated and how people have been asked to make decisions and use these benefits has been very bifurcated, and we think it’s time for that to change.”