John Hancock Investments' [profile] 401(k)-focused sibling just bought another U.S. shop. And the consolidation of the defined contribution retirement plan business continues.

Yesterday Hancock's parent, Canadian insurance giant Manulife, unveiled a deal for John Hancock retirement plan services here in the U.S. to buy New York Life's retirement plan services business. The deal, slated to close in the first half of next year, would create a defined contribution retirement plan recordkeeper with a combined $135 billion in retirement plan assets, from 2.5 million participants in 55,000 plans.

The Boston Business Journal, the Boston Globe, InvestmentNews, Pensions & Investments, PlanAdviser, the Wall Street Journal, and our sister publication, 401kWire, all covered the news.

The deal does not directly involve the John Hancock Investments mutual fund business or New York Life's MainStay mutual fund business.

Though the pricing and terms of the deal were not disclosed, it's at least partially a swap; New York Life is taking over, on a reinsurance basis, 60 percent of some of Hancock's life insurance policies, which translates into $7 billion of liabilities.

For fundsters doing (or aspiring to do) defined contribution investment-only (DC I-O) work, the deal will turn Hancock into a 401(k) recordkeeper that works with all but the largest of defined contribution plans. Hancock's own 401(k) business has been strong with smaller employers, while New York Life's has focused on medium and large employers (but not so large as, say, Fortune 500 companies). 

Edited by: Neil Anderson, Managing Editor


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