On the eve of Christmas Eve, two big players in the retirement plan industry made an announcement that seemed to pass quietly amid the hustle of the holidays—John Hancock will acquire New York Life’s Retirement Plan Services (RPS) business.

The resulting combined RPS businesses will consist of approximately $135 billion in assets under administration, 55,000 retirement plans and 2.5 million plan participants. The firm says the combined business will create a top-15 provider of retirement plan services in the mid-case plan market.

According to PLANSPONSOR’s latest Defined Contribution Survey, 93% of John Hancock’s RPS business is in the less than $5-million market. Peter Gordon, SVP and president of John Hancock RPS, tells PLANADVISER, most of its business is actually in the less than $3-million micro plan market. New York Life RPS has more business in the medium and large plan market.

According to Gordon, the acquisition will mean different things for different segments. “We offer creative plan design for small businesses, but do not offer total outsourcing,” he says. “We will continue to do what we do in the micro market; we have a third-party administrator do plan administration.”

However, with the acquisition of New York Life RPS, which has a strong nonqualified plans business, John Hancock will also promote total outsourcing, with which plan sponsors in the medium and large market can bring all their plan types—401(k), defined benefit and nonqualified—under one roof. “This gives us a more competitive edge,” Gordon says. “It is a capability we are very interested in, but we don’t plan to take it down to the micro market.”

He adds that by widening its breadth of solutions for retirement plans, John Hancock will be able to provide great service for plans from startups to those with 20,000 employees. Gordon says there’s a lot of growth potential for John Hancock in the true medium or small market. “Where we end, they don’t quite start,” he notes. “We are micro, they are medium to large. With our complementary infrastructure, we can get more market share in between.”

According to Gordon, for retirement plan intermediaries or consultants, the acquisition gives them a broader view of John Hancock; they can put all their business together with one service provider. He also notes that for intermediaries to plans that start small and “grow out of” John Hancock, it gives them the ability to stay with John Hancock. “I think advisers are looking for one place where they have solutions across the marketplace,” Gordon says. “The adviser feedback we’ve gotten so far is that this was a great move.”

As the industry has been consolidating, many plan sponsors have experienced mergers and acquisitions of recordkeepers; the acquisition gives plan sponsors with John Hancock or New York Life confidence that their provider will be there for them in the future, Gordon notes. He adds that clients of New York Life RPS will not experience a conversion or disruption of service. “As we said in our original announcement, we are making employment offers to every New York Life RPS employee, and we will continue to invest in its recordkeeping system,” Gordon says.

He says what clients will experience is new features and innovation. “We will accelerate the timeline of constant improvements; that’s what this business is—constant improvements,” Gordon states. “We listen to intermediaries and clients and develop solutions to meet their needs, not the other way around.”

The acquisition is still on the same timeline; the deal is expected to close sometime in the late second quarter, Gordon says. At the time of closing, the brand will be John Hancock.