In a two-part tradeoff, John Hancock will acquire New York Life's Retirement Plan Services business, and New York Life will take on a block of John Hancock's life insurance business.
The two deals were announced by both New York Life and John Hancock's Canadian parent Manulife Financial Corp. in a pair of separate statements.
By adding on New York Life's retirement plan services business, John Hancock will now have oversight of some 55,000 retirement plans, 2.5 million participants and $135 billion in assets — reflecting a 60% increase in assets under administration for John Hancock. New York Life's stable value business isn't included in the transaction; it will remain a division of Institutional Annuities at New York Life.
John Hancock Financial Services Inc. ranks 19th among defined contribution record keepers with $78.4 billion in assets as of Sept. 30, according to . Meanwhile, New York Life Investment Management is in 25th place with $39.5 billion in assets as of Sept. 30.
The acquisition rounds out John Hancock's retirement plan business and gives it broader market access, said Peter Gordon, president of John Hancock's Retirement Plan Services unit.
“By bringing the two RPS organizations together, we are joining John Hancock's leadership in the small-case market with New York Life's expertise and strength in the mid-plan and large-case markets,” Mr. Gordon noted in a written statement.
As for the life insurance deal, New York Life will acquire a closed block of 1.3 million participating whole life insurance policies in a reinsurance deal with John Hancock. The deal involves some $25 billion in policy face amount. John Hancock closed that block of business in 2000, the year the insurer became demutualized.
John Hancock will continue to service the policies, paying claims and dividends. Contract terms or policyholder benefits will not change as a result of the deal, according to Manulife.
New York Life's decision to partake in the two-part deal allows it to center its focus on its specialty of life insurance and annuities.
"This agreement is a strategic complement to the strong year over year organic growth we achieve through our career system, bringing a significant infusion of high-quality, whole life insurance reserves,” said Ted Mathas, chairman and CEO of New York Life in a statement.
Both deals are expected to close in the first half of 2015. Terms of the transactions weren't disclosed.
More details on John Hancock's retirement plan business are available from Pensions & Investments. Click for details on New York Life's retirement business, also from P&I.