The firm now has recordkeeping assets totaling $387 billion and a participant base of 6.8 million, making it second only to Fidelity Investments in both categories in the defined contribution (DC) recordkeeping business, according to the most recent PLANSPONSOR Recordkeeping Survey. Earlier in the year, Great-West Lifeco announced it was combining subsidiary Putnam Investments’ retirement plan business with Great-West Financial’s (see “Great-West, Putnam to Combine Retirement Businesses”).
Robert L. Reynolds, president and chief executive officer at Great-West Financial in Greenwood Village, Colorado, tells PLANSPONSOR, “This was a business opportunity to cover retirement in America.” He notes that the combined company will serve retirement plans of large and small corporate companies, 403(b)s of nonprofit organizations and 457 plans of government entities.
“Our strategy is to segment the business because these segments have different needs, but maintain for all a very high level of service quality and have the same participant and plan sponsor interface tools across the business,” he says.
The strategy will involve converting J.P. Morgan’s large DC plans onto the FASCore recordkeeping system, but Reynolds notes that to Great-West it is not an implementation, but an integration. “It is almost like a systems upgrade, because we have existing plan records and history. We are just moving it to a new platform under the same roof. It doesn’t have the same complexity as with changing from one recordkeeper to another.”
Great-West says it will make a series of key organizational and leadership announcements related to the combined retirement organization in the coming weeks. Reynolds says for most staff everything is business as usual for the three companies, because each has an existing book of clients to serve. J.P. Morgan’s business has more than 1,000 personnel, including sales staff, consultant relations, relationship managers and client service specialists.
In Great-West’s announcement that the acquisition was completed, Reynolds said, “We will deliver a new generation of savings vehicles, employee engagement strategies and innovative educational resources, client service and leading-edge technology.” He explains to PLANSPONSOR, “[We think] there’s a lot that can still be done to the existing [retirement] system. It works if you take advantage of auto-enroll, auto-escalation and target-date funds, but we think there’s an opportunity in the TDF space. They’ve been well received, but can be more personalized.”
Reynolds says the whole participant experience can be enhanced and made much simpler to use. “We need to get away from telling participants they need to save $2.5 million. If a 35-year-old hears that, he puts his hands up and gives up. We need to make it about telling participants how much to save and what fund to put their savings in,” he explains. He adds that with the goal of creating better outcomes for participants, Great-West is working on tools to make retirement plans simpler and easier to use. “We’ve already had tremendous results; we’re coming out with phase two.”
“What we’re trying to do here is move the needle in a very positive way for Americans’ retirement preparedness through greater participant engagement and a better experience for plan sponsors. The more simple and easy to use we can make this, the more people will use it,” he concludes.