The company said in a press release that it will also retain its trust, custody, non-qualified plan and health savings account businesses. US Bancorp, the parent company of U.S. Bank, beefed up its trust and custody business last year with the purchase of Wachovia Corporation’s corporate trust and institutional custody operations (See US Bancorp to Buy Wachovia Trust, Custody Operations ).
“The acquisition of the Wachovia institutional custody business demonstrates our commitment and willingness to invest in this business,” said Diane Thormodsgard, president of U.S. Bank, in the press release. “The sale of the 401(k) business allows us to concentrate our focus and resources on businesses where we have significant scale and/or opportunity for growth.”
She said the company didn’t have enough bulk in the 401(k) business to ultimately make further spending worthwhile. “By industry standards today, a book of two to three million participants is necessary to support continued investment,” Thormodsgard continued. She said U.S. Bank had approximately 195,000 participants.
Following the transaction,
Great-West Retirement Services will provide
401(k), 401(a), 403(b) and 457
retirement plan services to
more than 21,000 plans representing
nearly 3.5 million participants with more than $104
assets, according to the announcement, which said the terms of the deal were not disclosed.
Great-West has been moving aggressively to become a bigger player in the retirement business, especially on the DC side.
The company snagged the 401(k) and defined benefit business of Metropolitan Life Insurance Company in June, an agreement that includes nearly 2,600 plans and $7.5 billion in assets (See Great-West to Acquire MetLife 401(k) and DB Business ) The purchase of MetLife’s business nearly doubled the number of participants in Great-West’s full-service 401(k) business.
In 2005, Federated Investors revealed plans to sell its recordkeeping operation to Great-West (See Federated Offloads RK Business to Great West ).
More information about Great West’s current book of DC business – from PLANSPONSOR’s 2006 DC survey – is here .