December 23, 2014 – John Hancock Financial is buying New York Life’s retirement planning division for an undisclosed amount in a deal that will allow the Boston company to expand its 401(k) business by 60 percent as it moves from traditional life insurance into wealth management.
New York Life handles pensions and retirement plans for labor unions and midsize to large companies, such as the office supply chain Staples Inc. Until now, John Hancock has provided retirement planning services primarily to startups and smaller business.
The acquisition will bring $135 billion in assets and 55,000 retirement plans under John Hancock’s administration. As part of the purchase, John Hancock expects to offer positions to all 450 New York Life employees in Westwood who handle the retirement segment, said Craig Bromley, John Hancock’s president.
“It’s accelerates our business plan dramatically,” said Bromley, who was celebrating the news with a glass of champagne on Tuesday afternoon.
John Hancock’s parent company, Manulife Financial Corp., of Toronto, is trying expand into the more profitable wealth and investment management business in Canada. Tuesday’s announcement is an effort to replicate that strategy in the United States.
The purchase is not expected to have a significant impact on Manulife’s profits, about $1 billion in the third quarter of this year. But it should free up some capital, because as part of the deal New York Life has agreed to take on 60 percent of John Hancock’s life insurance policies that were written before 2000, company officials said.
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