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Ascensus, a leading provider of tax-advantaged investment and savings solutions, has entered into an agreement to acquire Vanguard's dedicated small business retirement business. This acquisition includes Vanguard's Individual 401(k), Multiple Participant SEP (Multi-SEP) and SIMPLE IRA plans
This transaction is expected to close in the third quarter of 2024.
As part of the agreement, Ascensus assumes responsibility for record keeping and customer service for these retirement plans. This transition will increase Ascensus' managed retirement plans to nearly 280,000, solidifying its position as the largest retirement plan administrator in the United States. Notably, plan participants will continue to have access to a variety of Vanguard mutual funds through the Ascensus platform.
Vanguard will maintain its offering of other individual retirement solutions, including a single-person SEP IRA designed for small business owners with no additional employees. This award ensures that Vanguard can continue to serve its broader customer base while focusing on its core competencies.
Nick Good, President of Ascensus, expressed excitement about the acquisition, noting that it will allow small business employers to benefit from both Vanguard's investment opportunities and Ascensus' operational excellence. “This acquisition provides small business employers with continued access to Vanguard’s investment strength, as well as the technology, expertise and operational excellence that customers have come to expect from Ascensus,” Good said.
From Vanguard's perspective, the decision to divest certain small business retirement plans reflects a strategic shift toward providers that can provide specialized management expertise. Armond Mosley, head of Vanguard's self-directed business, emphasized the importance of specialized administration for small business plans. “The scope and nuances of small business plan administration increasingly require deep specialization, and we believe business owners and their employees are best served by an organization that has extensive expertise and scale in servicing multi-SEP, SIMPLE IRA and Individual 401(k). Savers,” Mosley explained.
This transaction does not impact Ascensus' continued role in administering Vanguard's 529 education savings plans, underscoring the continued partnership between the two companies across various segments. Ascensus also manages many other state 529 plans.
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