“We were delighted when we heard The Hartford was going to be disposing of its retirement services business because it is so complementary to our business,” Elaine Sarsynski, executive vice president and head of MassMutual’s Retirement Services Division, told PLANSPONSOR.
The Hartford will add small plans business to MassMutual’s typically mid- to large-market book of business. According to PLANSPONSOR’s 2012 Recordkeeping Survey, $29 billion of The Hartford’s recordkeeping assets are with plans of size $10 million and less, while MassMutual has nearly $35 billion in the $1 million to $200 million plan market. Both companies work with fully-bundled and third party administrator (TPA) service models and both are very adviser-centric, Sarsynski said. She noted that the combined business will move MassMutual from its current place at number 20 to number 11 in the industry, in terms of assets under management, serving more than three million participants, with $125 billion in assets under management.
Hugh O’Toole, senior vice president of sales and client management for MassMutual’s Retirement Services Division, noted that MassMutual was considering government markets as the next niche it would pursue for growth, and The Hartford’s existing 457 plan business complements that strategy.
O’Toole said MassMutual does not envision that the company will “break” what is currently working for the companies and their adviser, plan sponsor and participant clients.The Hartford has a fully-operational recordkeeping platform that works well for its plans, and MassMutual’s proprietary platform works well for mid-market clients, he noted. For the foreseeable future, they will use both platforms, meaning that The Hartford’s current clients will not be forced into a platform conversion.
Sarsynski added that the office locations for the two businesses are also complementary - both have plan administration offices in Connecticut and adviser-support offices in Boston. MassMutual is thrilled about acquiring The Hartford’s call center in Phoenix because it wanted a presence in that time zone, she said.
For now, MassMutual plans to keep all locations. However, O’Toole said between now and the close of the transaction, company leaders will be working together to determine what is appropriate for the future.
As for new business, O’Toole stated the two companies are legally required between signing and close to remain two separate competitors, so both organizations have been told to compete and serve employees well. Legally, advisers should not speak about the combined corporation before close and approval by regulators. O’Toole believes the market will understand that anything sold under The Hartford, after close, will be backed by full faith and credit of MassMutual.
Sarsynski said they are calling the transaction a win to the fifth power because all constituents the companies work with will have enhanced products and services. Feedback from advisers, TPAs and sponsors has been very positive, she said.
According to Sarsynski, employees are thrilled with the opportunities this offers, and communities in which the firms have a local presence will be well-served.
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