JPMorgan Chase & Co. on Thursday announced the sale of its Overland Park-based retirement services business located on the Sprint campus to Great-West Financial.
The buyer said it intends to keep the local business — J.P. Morgan Retirement Plan Services — intact.
The J.P. Morgan unit has about 1,000 employees, mostly based here. It provides a broad array of recordkeeping services to more than 200 clients and 1.9 million participants with about $167 billion in 401(k) retirement assets.
Pending regulatory approval, the operation will be merged in the third quarter into Great-West Financial, based in the Denver suburb of Greenwood Village, Colo. The financial terms were not disclosed.
The deal will make Great-West the second-largest recordkeeper of 401(k)-type retirement plans, serving 6.8 million workers with a combined $387 billion in assets, the company said. The largest provider of retirement recordkeeping services is Boston-based Fidelity.
Great-West is a division of Canadian financial services and life insurer Great-West Lifeco Inc., based in Winnipeg, Manitoba.
The J.P. Morgan unit “is known for the quality of its services and the quality of its people, and that was an important part of acquiring the business,” said Bob Reynolds, president and chief executive officer of Great-West Lifeco U.S., the holding company that owns Great-West Financial and Putnam Investments.
“Our intention is all about growth,” said Reynolds.
He is scheduled to be here Friday to meet with management and staff of the newly acquired company, including chief operating officer James Gearin. Reynolds said he and Gearin worked together for more than a decade at Fidelity Investments.
Reynolds said workers with accounts administered by J.P. Morgan should expect no disruption. Clients will continue to work with the same staff, consultants and specialists, he added.
The Overland Park operation is an administrative hub and call center. Workers send out account statements and handle other communications for retirement plan participants, plan sponsors and investment advisers.
The J.P. Morgan operation moved from Kansas City to the Sprint campus about three years ago. At that time, it had about 800 employees.
The operation was originally a retirement plan services joint venture between J.P. Morgan and Kansas City-based American Century Investments. As part of the deal, the New York banking giant acquired more than 40 percent of American Century. But in 2003, J.P. Morgan bought control of the joint venture and later sold its stake in American Century.
Analysts said J.P. Morgan is selling its unit as recordkeeping for workers’ retirement accounts has become less lucrative for firms that don’t have scale.
The deal will catapult Great-West from the seventh-largest recordkeeper of 401(k)-type plans by assets in 2012, according to research firm Cerulli Associates, allowing it to compete with the biggest firms.