A few months ago, when Empower Retirement purchased the retirement plan business of Massachusetts Mutual Life Insurance, the deal didn’t receive much media attention, but it’s a move that could impact a few million people. The MassMutual Retirement plan business was huge. It involved about 26,000 different workplace savings plans and more than 2.5 million participants. Those plans represented about $167 billion in assets. Analysts of the deal say it combines the expertise of both companies and will provide a better product for customers. The more than $3.35 billion-dollar transaction is expected to receive regulatory approval during the final quarter this year.

“This deal represents a trend of acquisitions in the retirement savings industry,” said Griffin Heckaman, Retirement Plan Advisor for Hilltop Wealth Solutions. “More and more plan providers are being purchased by big companies. Don’t get me wrong, there are great benefits to acquisitions like this. Participants often gain access to better website software and more financial wellness resources when providers combine resources. However, if I am a plan sponsor, I would not want to ignore this trend and the some potential dangers, too. It’s now more important than ever for business owners to exercise their fiduciary duty to periodically monitor and compare (benchmark) their own plan providers. I would emphasize the importance they reach out to their independent fiduciary advisor to assist them in understanding how these acquisitions could influence them.”

Hilltop Wealth Solutions owner Erik Brenner says the entire business is definitely changing.

“The investment world is changing rapidly. There are so many more options and choices for people. But that’s why we’re in business. That’s what we do.”

The addition of MassMutual’s retirement plan business will boost Empower’s total number of participants to more than 12.2 million and increase its workplace savings plans to about 67,000, representing about $834 billion in assets. Empower is now the second largest retirement plan recordkeeper in the United States. Fidelity is the only company with more participants.

“Together, Empower and MassMutual connect a broad spectrum of strength and experience with a shared focus on the customer,” said Edmund F. Murphy III, President and Chief Executive Officer of Empower Retirement, when the deal was announced in September. “We are excited about the opportunity to reach new customers and serve even more Americans on their journey toward creating a secure retirement.”

MassMutual Chairman, President and CEO Roger Crandall said it was a good deal for everyone. He made this statement when the deal was first announced.

“In Empower, we are pleased to have found a strong, long-term home for MassMutual’s retirement plan business, and believe this transaction will greatly benefit our policyowners and customers as we invest in our future growth and accelerate progress on our strategy.”

“I’m not saying people shouldn’t feel secure about this deal,” said Heckaman. “I just want to make sure sponsors understand they are the ones in charge of their plan’s destiny, not executives. They need to know they can get guidance on a more personal level. If they don’t have a current advisor, they should reach out to an independent fiduciary consultant sooner rather than later.”

Industry experts say Empower has a great reputation as a company with an excellent information technology system and they say the company has built strong support systems for retirement plans.

MassMutual customers will be moved to Empower’s record keeping system over the next year and a half, following the final approval of the deal. When the transactions are all complete the new enterprise will be called Empower Retirement.

“Behind the scenes, a deal like this requires a significant exchange of information and data,” said Heckaman. “I’ve been involved in many plan transitions of a 401(k) from one provider to another, and I can say it is an intricate and complex process. In my experience, even transferring one 401(k) is difficult to execute without a hiccup. I cannot imagine 26,000 plans at once. I would encourage everyone with a retirement plan held at MassMutual, to reach out to their plan advisor immediately so they understand the scope of the work in the transition that will be required of them in the upcoming year. I feel concern about integrity of participant data and savings for plans that experience this transition without the guidance of an independent fiduciary on their team. If they don’t have a plan advisor, they should reach out to a fiduciary like my team for guidance.”

Heckaman says there is certainly no need to panic, plans at Mass Mutual will have consultants from Empower helping them.

“I have heard that Empower is gathering a team of transition specialists to ensure data and participant savings transfer accurately, to the extent possible. Empower and MassMutual will work to provide sponsors an easy transition, however,

Heckaman reminds sponsors their option to choose where that transition occurs and who helps them with it.
Stephen Gawlik is the Vice President of Corporate Affairs for Empower. In an interview with PLANADVISER magazine, he says MassMutual customers will be able to keep their existing investments if they choose. But he says a company called Personal Capital, which Empower purchased earlier this year, has what he calls “a best-of-breed financial wellness offering that gives clients a full suite of tools, and the best digital and

In the end, Heckaman believes preparedness is the key for those who are affected.

“The ultimate responsibility is on the plan sponsor, however. It’s their retirement plan,” he said. “When I am speaking with a plan sponsor who is facing an acquisition, I ask them, do you want others deciding who is best fit to provide your company’s retirement benefits, or should you decide?” Selecting your plan provider is an important duty that fiduciary advisors facilitate regularly for business owners.
Brenner says he understands how difficult it is to run a business and also find time to make sure your company’s retirement savings plan is working for your employees.

“As a business owner I know the day to day work can get you really busy. We find a lot of business owners just don’t take enough time to take care of their plan, but you have a responsibility as the decision maker to make sure your plan is a good one. Having the right person on your team is key to doing that.”

Heckaman’s focus at Hilltop Wealth Solutions is managing retirement plans. He is there to help business owners who want the best for their employees but don’t really have the time to help them or educate them about their retirement savings plans. And, like all the advisors at Hilltop, he can help individuals who may have questions about their plans.