The Hartford flexes its muscles in the US pension market

US insurer and financial services provider The Hartford
Financial Services Group (The Hartford) marked the final month of
2007 with an acquisition spree that boosted total assets of its
pensions business to $46 billion, an increase of almost two-thirds
compared with the end of the third quarter of 2007. The
acquisitions, combined with strong growth in existing business,
will mean The Hartford ends 2007 having almost doubled its pension
business assets. The number of pension plans in The Hartford’s fold
will have increased from about 18,000 to 24,700 and the number of
plan participants from about 560,000 to 1.6 million.

The most significant acquisition was Sun Life Retirement
Services (SLRS), a US unit of Canadian financial services group Sun
Life Financial. The acquisition of SLRS, a provider of
record-keeping and administrative services to defined contribution
(DC) plans, will bring with it an additional $17 billion in DC
retirement plan assets across 6,000 plans and 465,000 plan
participants.

“This acquisition clearly boosts our retirement plans business,
helping to accelerate growth, open new markets and better serve our
customers,” said John Walters, president of The Hartford’s US
Wealth Management Group and co-COO of The Hartford’s life
operations.

Sun Life Financial’s US president, Bob Salipante, explained that
after a thorough review, it was determined that the best course of
action was to focus on parts of the US retirement and wealth market
where Sun Life has or can achieve competitive advantage, scale and
a market leadership position.

Sun Life Financial’s wealth strategy in the US includes a
significant presence in asset management via its subsidiary
Massachusetts Financial Services Company (MFS). MFS has
distribution relationships with SLRS that will continue when the
SLRS business moves to The Hartford.

The second of The Hartford’s acquisitions was the DC plan
record-keeping business of Princeton Retirement Group (PRG), a
supplier of services to workplace pension plans. The acquisition
will give the Hartford what Walters termed ”a foothold” in the
business of providing record-keeping services to large financial
organisations offering DC plans to their clients.

He explained that The Hartford’s ability to grow its retirement
plans business depends in part on being able to provide retirement
programmes under its own brand while also offering its services to
companies that offer retirement plans under their own brand. The
acquisition of the PRG unit will add $7 billion in retirement plan
assets across over 720 plans and about 170,000 plan
participants

The third of The Hartford’s acquisitions came in the form of
TopNoggin, a defined benefit administration and consulting company
that has developed internet-based technology solutions in areas
such as data management, administration and benefit
calculations.

“Our defined contribution customers have made it clear they want –
‘need’ is really the word – help administering their defined
benefit plans,” said Walters. “TopNoggin’s real-time technology and
expertise lets us answer that call with leading edge
technology.”

In addition to adding technological clout, TopNoggin will bring
with it 50 clients with more than $4 billion in defined benefit
plan assets and 375,000 plan participants.