Voya Financial, Inc. and OneAmerica Financial, Inc. have made public their conclusive agreement for Voya to acquire the complete retirement plan services of OneAmerica.
This transaction will introduce around $60 billion in assets under administration (AUA) to Voya’s Wealth Solutions sector, bringing its total AUA to $580 billion. It is anticipated that this acquisition will expand Voya’s coverage of retirement plans to 60,000, with a participant base increasing to 7.9 million. The initial purchase amount for the acquisition stands at $50 million, along with deferred payments totaling up to $160 million set to be paid in the second quarter of 2026, dependent on plan consistency and transition incentives.
In the first year following the acquisition’s completion, it is estimated to generate no less than $75 million in pre-tax adjusted operating income and upwards of $200 million in net revenue. After the deal concludes, a significant number of OneAmerica’s full-service retirement plan staff will integrate into Voya’s workplace solutions group. This acquisition is poised to fortify Voya’s position within the emerging and mid-market plan sponsor segments while also launching new services, including employee stock ownership plan (ESOP) management and new distribution agreements.
Notably, this transaction excludes OneAmerica’s institutional markets division, which manages its pension risk transfer activities.
Voya broadens its retirement service offerings
Heather Lavallee, CEO of Voya Financial, stated, “This announcement presents an exhilarating opportunity to scale up and incorporate new capabilities into our Wealth Solutions division.
It supports our strategic objective to provide enhanced workplace benefits and savings solutions, leading to better financial results for our clients.”
Scott Davison, Chairman, President, and CEO of OneAmerica Financial, remarked, “For the past 60 years, we have empowered our clients to navigate daily challenges with increased confidence. Voya is the ideal partner to uphold our commitment to the retirement sector. This agreement represents a significant opportunity for our clients and team members as they transition and continue to thrive with Voya.”
Rob Grubka, CEO of Workplace Solutions at Voya Financial, added, “This acquisition reflects Voya’s unwavering emphasis on customer satisfaction and expands our capacity to provide health, wealth, and investment solutions within the workplace.
The integration of OneAmerica’s extensive retirement services with our current offerings fortifies our dedication to aiding participants across every market segment.”
The deal is projected to finalize on January 1, 2025, subject to standard closure conditions, including necessary regulatory approvals. Voya plans to share additional information during its third-quarter earnings call in 2024. Recordkeepers such as Voya and OneAmerica are encountering pressure on fees and evolving demands from plan sponsors, advisers, and consultants.
Plan adviser Grant Ellis highlighted that the consolidation of recordkeepers can improve capabilities and lower costs for clients, though it may also pressure the systems, staff, and operations of the involved companies, potentially causing disruptions in customer experience. Voya’s Grubka asserts that merging benefits into a single platform is crucial for effective growth. He stresses the importance of transforming the traditional segmentation of benefits, stating, “We now possess a much more extensive product range to enhance the experience and outcomes for employees.”
