Aon, Ameriprise Joint Venture Grew Out of Bundled Services Interest

That was the genesis of last week’s announcement that the two companies had unveiled a new joint venture called Retirement3 – Retirement Through the Power of Three to deliver a variety of DB services along with a similar list of DC offerings (See  Ameriprise and AON Join Outsourcing Forces).   

“We’ve known for some time that certain segments of the (retirement services) market are looking for a combined (recordkeeping and administration) effort,” John Baker, an Ameriprise senior vice president, told PLANSPONSOR.com. Not only that, but Baker said clients suggested it would be better for Baker’s firm to partner with an existing DB vendor rather than trying to develop DB capabilities itself.

In an interview with PLANSPONSOR.com, Susan Alford, a senior vice president and national defined contribution practice leader for Aon Consulting, said her organization had been looking for a joint venture partner from the DC space for about two years. After working out a tentative pact with the Minneapolis-based Ameriprise, she said it took another 12-14 months to work out the details – notably the technology to allow joint venture clients to seamlessly access both DC and DB plan records via the same Web portal.

“Each organization has brought to the table the strengths they had,” Alford asserted.

Alford and Baker said that while both firms will work bundled DB-DC clients jointly, that their arrangement is not a corporate consolidation. Each joint venture partner will continue serving its own individual clients as well.

Split Responsibilities

Officials from both companies split up the joint venture responsibilities. Ameriprise (formerly American Express Retirement Services) will contribute

• defined contribution recordkeeping and plan administration
• assistance with defined contribution plan compliance
• investment management; trustee and custodial services
• retirement education and planning services.

Meanwhile, according to the companies, Aon Consulting personnel will offer:

• assistance with defined benefit plan design
• administration and compliance
• actuarial valuation services and retirement plan consulting services
• retirement and total compensation statements
• customized communication

Aon will also offer joint clients Total Human Resource Outsourcing services and a joint HR Portal through which participants can access their bundled account information.

Baker said it wouldn’t have been as productive from a business sense for Ameriprise to stay squarely in the DC space and not be able to respond to clients seeking bundled providers. “In the event they are interested in a (bundled) solution, we wanted to have something to offer them,” Baker contended, calling a decision not to proceed with a joint venture “short-sighted.”   He added: “This is a product we think we can sell in the marketplace.”

The Aon services will be concentrated at its current Winston Salem, North Carolina andRolling Meadows, Illinois facilities while Ameriprise will house its personnel at its Minneapolis, Minnesota headquarters, officials said.