A recent bank mega-merger could soon lead to the sale of a 401(k) recordkeeping business.
Word is that the folks at Charlotte, North Carolina-based, publicly traded Truist are trying to sell at least part of their retirement plan business. Truist was created last December out of the planned merger of Winston Salem, North Carolina-based BB&T and Atlanta-based SunTrust, and both firms brought 401(k) businesses. (According to the Truist team, they're now the sixth biggest bank in the U.S.)
Jeff Hancock, who served as director of retirement services on the BB&T side, did not return a call for comment. A Truist spokesperson declined to comment "on speculation and rumors."
According to a source familiar with the situation, the deal talk has narrowed to a pair of finalists: Alerus, another publicly traded bank; and Ameritas, a mutually owned insurer. Both Ameritas and Alerus have retirement plan recordkeeping businesses of their own, and both have previously acquired retirement plan businesses.
Brian Overby, president of Alerus' retirement and benefits unit, did not return a call for comment. An Alerus spokersperson declined to comment.
Jim Kais, senior vice president of retirement plans at Ameritas, did not return a call for comment. An Ameritas spokesperson declined to comment.
Other players, like private equity-backed recordkeepers, have been acquisitive and could also be interested in the deal. Truist's existing recordkeeper allies might be interested, too.
Truist has several legacy retirement plan businesses. From the SunTrust side, Truist has a small-market 401(k) business that is powered by Empower Retirement. From the BB&T side, Truist has another small-market 401(k) business, powered by Ascensus. And BB&T also brought a business with larger plans, recordkept in-house and running on FIS' Omni system. (Ameritas and Alerus also use Omni.)
An Empower spokesperson was not immediately able to comment. An Ascensus spokesperson declined to comment.
When the BB&T-SunTrust merger was first unveiled in early 2019, BB&T had about 218,000 retirement participants, while SunTrust had about 100,000 participants, translating to a grand total of about 318,000 participants. The two banks' own 401(k) plans have about 80,000 participants combined, based on pre-merger numbers, and word is that about 125,000 of the outside participants are in the piece recordkept in-house, on Omni (with the rest in plans recordkept by Ascensus or Empower). (Alerus' business, by comparison has about 361,000 retirement plan participants; current numbers for Ameritas were not immediately available.)