Manulife announces transaction with New York Life, significantly expanding its Retirement Plan Services business

In addition, New York Life- one of the largest life insurers in the world- has agreed to assume, on a reinsurance basis, 60 per cent of certain John Hancock life insurance policies.

The transaction is expected to close in the first half of 2015, subject to regulatory approvals and other customary closing conditions.

“Manulife is a major player in the pensions business in Canada, the United States, Hong Kong and Indonesia. This transaction, similar to our recently announced acquisition of Standard Life’s Canadian operations, will significantly increase our retirement plans business overall,” said Donald Guloien, president and CEO of Manulife.

“When completed, these transactions will each accelerate our strategy to grow our wealth and asset management businesses around the world,” Guloien added.

“The enhanced capabilities of the combined RPS businesses advance John Hancock’s continued leadership in helping Americans enjoy a better, financially secure retirement. As well, exchanging a portion of John Hancock’s in-force closed block life insurance policies for New York Life’s RPS business redirects capital to a higher growth, less capital intensive, higher return business,” said Craig Bromley, John Hancock’s president.

John Hancock’s acquisition of New York Life’s RPS business will increase John Hancock’s RPS assets under administration by approximately 60 per cent, accelerate its expansion into the mid-case to large-case private sector retirement plan markets, and add both scale and expertise to John Hancock in a strategically significant line of 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 combined business is expected to create a top 15 provider of retirement plan services in the mid-case plan market and solidify its leading position in the small-case market, as measured by assets under administration.