John Y. Kim, president of CIGNA Retirement & Investment Services, will lead the retirement organization once the businesses are combined, reporting directly to John Strangfeld, vice chairman of Prudential Investments for Prudential Financial. Scott Sleyster, the current president of Prudential Retirement, will assume leadership of the combined full service retirement business, after the close, reporting to John Kim.
CIGNA Retirement spokesperson Ron Hurt told PLANSPONSOR.com , “From the perspective of CIGNA’s plan sponsors and plan trustees, the good news is that there will be little or no change to our plans, our services, or to the teams servicing those plans.”
Also unchanged, at least for the time being, are the jobs of workers at both firms. “Because the two operations complement each other, we expect that most jobs will be unaffected,” Hurt said. “Because we have different product and service capabilities and strengths, and because we are focused on complementary distribution channels and market segments, we view this decision as a “perfect partnership.”
The transaction will add $52 billion to Prudential’s assets under management, according to a news release announcing the deal, pushing its total retirement assets to almost $120 billion. The purchase also will double Prudential’s defined contribution assets to $56 billion and its participant base to two million participants.
The combined organization will operate in its current locations in Hartford, Connecticut; Dubuque, Iowa; Scranton, Pennsylvania; Florham Park, New Jersey; and Woodbridge, New Jersey, as well as various field offices.
“A strong presence in the retirement market is essential for success in asset gathering and asset management,” Prudential Chairman and Chief Executive Arthur Ryan said in a statement. “This transaction with CIGNA builds on our presence in the retirement market by adding significant scale and capabilities, while offering attractive returns to shareholders.”
CIGNA will retain CIGNA Investment Management, TimesSquare Capital Management, and their corporate insurance business, all currently part of CIGNA Retirement & Investment Services.
Last July, with its health-care business struggling, CIGNA announced that it was exploring the possible sale of the retirement business or separating it from the health insurance business into a new company within CIGNA Corp (See CIGNA Could Sell, Spin-off Retirement Biz ). At the time, reports said potential bidders included Principal Financial Group Inc., Lincoln National Corp., Manulife Financial Corp., Putnam Investments, and Fidelity Investments, although early on Prudential emerged as the rumored acquirer.