Winnipeg, April 4, 2022. . . Great-West Lifeco today announced that its US subsidiary, Empower, has completed the previously announced acquisition of Prudential Financial Inc.’s full-service retirement business.
With completion of acquisition, Empower’s reach in the US expands to more than 17.1 million participants in retirement plans and assets under management1.2 to $1.4 trillion on behalf of approximately 71,000 workplace savings plans.
“We are pleased that this strategic transaction has advanced Great-West Lifeco’s value creation priorities and accelerated our growth, and demonstrated immediate accrual of gains from revenue and expense synergies,” said Paul Mahon, President and CEO. executive of Great-West Lifeco. “Empower and its clients benefit from significant scale and added capabilities, further cementing Empower’s leadership position in the world’s largest retirement market.”
With strong margins and an earnings profile, the Prudential business acquired by Empower includes diversified capabilities across all plan types with a significant presence in the attractive small and midsize business market segment.
For additional details on the transaction, please see the press release dated July 21, 2021.
Headquartered in the Denver metro area, Empower manages approximately $1.4 trillion in assetstwo for more than 17 million retirement plan participants and is the nation’s second-largest retirement plan registrar by total participants.3 Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, medium and large corporate 401(k) clients; nonprofit 403(b) entities; private label record keeping clients; and IRA clients. Personal Capital, a subsidiary of Empower, is an industry-leading hybrid wealth manager. For more information, visit empower.comOpen a new website in a new window and connect with us on FacebookOpen a new website in a new window, TwitterOpen a new website in a new windowLinkedInOpen a new website in a new window and InstagramOpen a new website in a new window.
About Great-West Lifeco Inc.
Great-West Lifeco is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. We operate in Canada, the United States and Europe under the Canada Life, Empower, Putnam Investments and Irish Life brands. At the end of 2021, our companies had approximately 28,000 employees, 215,000 advisor relationships, and thousands of distribution partners, all serving more than 33 million customer relationships in these regions. Great-West Lifeco is listed on the Toronto Stock Exchange (TSX) under the symbol GWO and is a member of the Power Corporation group of companies.
Cautionary note regarding forward-looking information
This release may contain forward-looking information. Forward-looking information includes statements that are predictive in nature, depend on or refer to future events or conditions, or include words such as “will”, “may”, “expects”, “anticipates”, “intends”, “plans”. , “believes”, “estimates”, “target”, “target”, “potential” and other similar expressions or negative versions thereof. These statements include, but are not limited to, statements regarding Great-West Lifeco’s growth strategy and prospects and the expected benefits of the acquisition of Prudential’s retirement services business (including benefits of scale, value creation and synergies). income and expenses).
Forward-looking statements are based on expectations, forecasts, estimates, predictions, projections and conclusions about future events that were in effect at the time of the statements and are inherently subject to, among other things, risks, uncertainties and assumptions about Great-West Lifeco. , economic factors, and the financial services industry in general, including the insurance, mutual fund, and retirement solutions industries. They are not guarantees of future performance, and the reader is cautioned that actual events and results may differ materially from those expressed or implied by forward-looking statements. In particular, when referring to the accrual of earnings with respect to the Prudential acquisition, management has estimated certain pro forma adjustments after income taxes based on the following assumptions: a USD-CAD exchange rate of 1.25; pre-tax expense synergies of $180 million and pre-tax income synergies of $20 million; incremental financing costs and foregone investment income of $97 million; and amortization of intangibles. Many of these assumptions are based on factors and events that are not within the control of Great-West Lifeco and there is no guarantee that they will prove to be correct. Whether or not actual results differ from forward-looking information may depend on numerous factors, developments and assumptions, including, but not limited to, the severity, magnitude and impact of the COVID-19 pandemic (including the effects of the COVID-19 pandemic -19 and the effects of the responses of governments and other companies to the COVID-19 pandemic on the economy and financial results, financial condition and operations of Great-West Lifeco), the duration of the impacts of COVID- 19 and the availability and adoption of vaccines, the effectiveness of vaccines, the emergence of variants of COVID-19, assumptions about sales, fee rates, asset breakdowns, maturities, contributions to plans, reimbursements and market returns, the ability to integrate the acquisitions of Personal Capital Corporation (Personal Capital) and the retirement services business of Massachusetts Mutual Life Insurance Company (MassMutual) and Prudential, the ability to leverage Em power, Personal Capital and MassMutual and Prudential’s retirement services businesses and achieving anticipated synergies, customer behavior (including customer response to new products), Great-West Lifeco’s reputation, market prices for products provided, sales levels, premium income, fee income, expense levels, mortality experience, morbidity experience, policy and plan lapse rates, net contribution from participants, reinsurance, liquidity requirements, capital requirements, credit ratings, taxes, inflation, interest and foreign exchange rates, investment securities, hedging activities, global equity and capital markets (including ongoing access to global equities and markets). of debt), the industry sector, and the financial conditions of individual debt issuers (including developments and volatility that arising from the COVID-19 pandemic, particularly in certain industries that may form part of Great-West Lifeco’s investment portfolio), business competition, impairments of goodwill and other intangible assets, Great-West Lifeco’s ability to to execute nice strategic plans and changes to strategic plans, technological changes, gaps or failures in information and security systems (including cyber attacks), payments required under investment products, changes in local and international laws and regulations, changes in accounting policies and the effect of applying future changes in accounting policy, changes in actuarial standards, unexpected legal or regulatory proceedings, catastrophic events, continuity and availability of staff and outside service providers, Great-West Lifeco’s ability to complete strategic transactions and integrate acquisitions, unplanned material changes in Great -West Lifeco facilities, customer and employee relationships or credit arrangements, levels of management and operating efficiency, changes in business organizations, and other general economic, political, and market factors in North America and internationally.
The reader is cautioned that the foregoing list of assumptions and factors is not exhaustive, and there may be other factors listed in filings with securities regulators, including factors set forth in Great-West Lifeco management’s discussion and analysis for for the year ended December 31, 2021 under “Risk Management and Control Practices” and “Summary of Critical Accounting Estimates” and on Great-West Lifeco’s Annual Information Form dated February 9, 2022 under “Risk Factors,” which, along with other presentations, is available for review at www. sedar.com. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not to place undue reliance on forward-looking information.
Other than as specifically required by applicable law, Great-West Lifeco does not intend to update any forward-looking information, whether as a result of new information, future events or otherwise.
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1. Estimated joint assets under management of Empower Retirement and the full-service retirement business of Prudential Financial Inc.
2. As of April 1, 2021. Information refers to all retirement businesses of Great-West Life & Annuity Insurance Company (“GWLA”) and its subsidiaries, including Empower Retirement, LLC, Great-West Life & Annuity Insurance Company of New York (“GWLANY”) and Prudential Retirement Insurance & Annuity Company (“PRIAC”), trading under the Empower brand. Assets represent the pro forma estimated consolidated assets under management (“AUA”) of Empower and Prudential Financial, Inc.’s full-service retirement business, as of December 31, 2021. AUA is a non-GAAP financial measure and does not reflect the financial stability or soundness of a company. Additional information regarding this measure is incorporated by reference and can be found under “Non-GAAP Financial Measures and Ratios” in Great-West Lifeco’s 2021 Annual Management Discussion and Analysis, available on SEDAR at www.sedar.com. As of December 31, 2021, GWLA’s statutory assets are $75.9 billion and liabilities are $73.0 billion, GWLANY’s statutory assets are $4.1 billion and liabilities are $3.9 billion, and PRIAC’s statutory assets are $100.329 billion and liabilities are $98.793 billion.
3. Classification of the 2021 Pensions and Investments Defined Contribution Survey as of April 2021.