The transaction is an "excellent strategic fit" for Empower Retirement, said Great-West chief executive
"We really like the way this fills out those client segments on the overall Empower platform," Mahon said in an interview.
Empower provides its clients and their employees with a platform for managing the
"They're able to get a tax-deductible contribution (and) their employer would typically match those contributions, or have some level of matching," Mahon said.
Great-West Life offers similar services in
The company uses a similar group plan model in
Employer plans provide a good way to reach a large number of affluent investors, he added, and Mahon said Great-West has been seeing increased participation in employer-sponsored plans like this as well as through robo-advisers.
"This business is really well-positioned to actually thrive in a COVID-style environment. We fundamentally believe we're strengthening in an area where the market is going," Mahon said. "So we decided it was the right time for us to take advantage of it ... and create value for shareholders."
Empower, which is 100 per cent owned by Great-West, was created in 2014 to acquire the retirement plan services business of
Based near
The MassMutual retirement services business will add 26,000 plans with approximately 2.5 million participants and
The deal is expected to close in the fourth quarter of 2020.
MassMutual said in a separate announcement that the retirement plan portion of its business employs approximately 2,000 people.
"In Empower, we are pleased to have found a strong, long-term home for MassMutual’s retirement plan business, and believe this transaction will greatly benefit our policy owners and customers as we invest in our future growth and accelerate progress on our strategy," said
In addition, Empower and MassMutual plan a partnership through which digital insurance products offered by
Empower's newly acquired
In August, Empower closed its acquisition of
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