Aegon, through an affiliate of its Transamerica unit, has reached an agreement with Mercer HR Services, LLC to acquire Mercer’s U.S. defined contribution (DC) administration book of business.
Upon completion of the acquisition, the defined contribution business will transition to Transamerica Retirement Solutions, which Aegon says will become a top ten DC recordkeeper based on plan participants and assets.
The transaction complements Transamerica’s current retirement services offering, which has experienced success and growth in the large and mega markets with a primary focus in the not-for-profit segment.
“This agreement with Mercer further strengthens Transamerica’s leading position in the U.S. retirement sector, with the know-how and broad capability to serve every retirement plan market segment,” says Mark Mullin, a member of Aegon’s Management Board and president and CEO of Transamerica. “This latest strategic development supports our aim to further grow and diversify our customer base, while continuing to expand our offering of fee-based retirement solutions.”
As a result of the acquisition, the number of retirement plan participants serviced by Transamerica will increase by 917,000 to approximately 5 million. Assets under administration (AUA) will increase by $71 billion to approximately $216 billion (as of August 31, 2015).
In addition, Transamerica will become the preferred defined contribution recordkeeping provider for Mercer’s total benefit outsourcing and total retirement outsourcing clients going forward. Ken Haderer, Mercer’s chief operating officer, notes, “We also want to clearly state that we are committed to continuing to provide best of class service to our defined benefit and health clients through our own solutions.”
Additionally, this transaction provides Transamerica the opportunity to further serve the growing market for individual retirement account rollover products and retirement counselling services.
The transaction is expected to close in the fourth quarter of 2015, subject to regulatory approval.