Key Points
- Ascensus has announced it will acquire Vanguard's Individual 401(k), Multiple Participant SEP (Multi-SEP), and SIMPLE IRA Plans
- The transaction will see Ascensus handling record-keeping, client servicing, and administration for the acquired plans, with customers retaining access to Vanguard's mutual funds.
- This deal is particularly significant for small businesses, as Vanguard was one of the larger Solo 401k plan providers.
Ascensus, a leader in tax-advantaged investment and savings solutions, has entered into an agreement to acquire Vanguard’s specific small business retirement plan operations. This acquisition includes Vanguard's Individual 401(k), Multiple Participant SEP (Multi-SEP), and SIMPLE IRA Plans
This deal is anticipated to close in the third quarter of 2024.
Under the terms of the deal, Ascensus will take over the record-keeping and client servicing responsibilities for these retirement plans. This transition will increase Ascensus' managed retirement plans to nearly 280,000, solidifying its position as the largest administrator of retirement plans in the United States. Notably, plan participants will continue to have access to a diverse array of Vanguard mutual funds through the Ascensus platform.
Vanguard will maintain its offerings in other individual retirement solutions, including a one-person SEP IRA, designed for small business owners without additional employees. This distinction ensures that Vanguard continues to serve its broader customer base while focusing on its core competencies.
Ascensus President Nick Good expressed enthusiasm about the acquisition, noting that it will allow small business employers to benefit from both Vanguard's investment capabilities and Ascensus' operational excellence. "This acquisition offers small business employers continued access to Vanguard's investment strength and the technology, expertise, and operational excellence that clients have come to expect from Ascensus," Good stated.
From Vanguard’s perspective, the decision to divest certain small business retirement plans reflects a strategic realignment towards providers who can offer specialized administrative expertise. Armond Mosley, head of Vanguard’s Self-Directed business, emphasized the importance of specialized administration for small business plans. “The breadth and nuance of small business plan administration increasingly requires deep specialization, and we believe business owners and their employees will be best served by an organization with significant expertise and scale in serving Multi-SEP, SIMPLE IRA, and Individual 401(k) savers,” Mosley explained.
This transaction does not affect Ascensus' ongoing role in administering Vanguard’s 529 education savings plans, which highlights the continuing partnership between the two firms in different segments. Ascensus also administers many other state 529 plans.
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