Voya Financial, Inc. and OneAmerica Financial, Inc. have announced a definitive agreement for Voya to acquire OneAmerica’s full-service retirement plan business.
The acquisition will add approximately $60 billion in assets under administration (AUA) to Voya’s Wealth Solutions division, raising its total AUA to $580 billion. The deal is expected to increase Voya’s retirement plan coverage to 60,000 and participant pool to 7.9 million. The upfront purchase price for the deal is $50 million, with deferred consideration of up to $160 million payable in the second quarter of 2026, contingent on plan persistency and transition incentives.
The acquisition is projected to deliver at least $75 million of pre-tax adjusted operating earnings and more than $200 million of net revenue in the first year post-closing. Upon the deal’s closure, a majority of OneAmerica’s full-service retirement plan employees will join Voya’s workplace solutions team. The acquisition will enhance Voya’s emerging and mid-market plan sponsor segments and introduce new capabilities such as employee stock ownership plan (ESOP) administration and new distribution partnerships.
The sale does not include OneAmerica’s institutional markets business, which covers its pension risk transfer operations.
Voya expands retirement services portfolio
Heather Lavallee, CEO of Voya Financial, remarked, “This announcement is an exciting opportunity to add scale and new capabilities to our Wealth Solutions business.
It aligns with our strategy to offer enhanced workplace benefits and savings solutions, supporting improved financial outcomes for our customers.
Scott Davison, Chairman, President, and CEO of OneAmerica Financial, stated, “For 60 years, we have helped our customers face every day with greater certainty. Voya is the firm to continue delivering on our commitment to serving the retirement market. This agreement offers a significant opportunity for our customers and associates as they transition and continue to grow with Voya.
Rob Grubka, CEO of Workplace Solutions at Voya Financial, added, “This acquisition aligns with Voya’s dedicated focus on customer satisfaction and expands our ability to deliver health, wealth, and investment solutions through the workplace.
Combining the breadth of OneAmerica’s retirement capabilities with our existing suite reinforces our commitment to supporting participants across all market segments.”
The transaction is expected to close on January 1, 2025, pending customary closing conditions, including regulatory approvals. Voya intends to provide further details during its third-quarter 2024 earnings call. Recordkeepers like Voya and OneAmerica are facing fee pressure and evolving needs from plan sponsors, advisers, and consultants.
Plan adviser Grant Ellis points out that recordkeeper consolidation can enhance capabilities and reduce costs for clients but can also strain the systems, personnel, and operations of the involved firms, leading to possible customer experience disruptions. Voya’s Grubka believes that the consolidation of benefits into a single platform is essential for efficient and effective growth. He emphasizes the need to change how benefits have been traditionally segmented, stating, “We’ve got a much broader product portfolio now to differentiate that experience and the outcomes for an employee.”
