What You Need to Know
- Ascensus will take on Vanguard’s individual 401(k) plan retirement plan recordkeeping business, along with its multiple participant SEP and SIMPLE IRA plans.
- Plan participants will retain access to a diverse lineup of Vanguard mutual funds via the Ascensus platform.
- The news reflects significant consolidation in the competitive and margin-compressed retirement plan recordkeeping business.
Ascensus announced Tuesday afternoon its agreement to acquire Vanguard’s individual 401(k) retirement plan recordkeeping business, along with its multiple-participant SEP and SIMPLE IRA plan business.
Once finalized, Ascensus will assume recordkeeping and client servicing for Vanguard’s individual retirement plan clients, boosting its number of plans under administration to nearly 280,000. Ascensus will provide custodial and trustee services, recordkeeping, client servicing, transaction processing, tax reporting and other services to former Vanguard clients.
Plan participants will retain access to a diverse lineup of Vanguard mutual funds via the Ascensus platform, according to the announcement. Post-transaction, Vanguard will continue to offer a one-person SEP IRA solution for small-business owners who do not employ others, and the agreement does not include Vanguard’s other retirement offerings.
As noted on the IRS website, an individual 401(k) plan, or Solo 401(k), is essentially the same as a traditional 401(k) plan, but it covers a business owner with no employees — or that person and his or her spouse. These plans otherwise have the same rules and requirements as any other 401(k) plan.
The announcement cites Ascensus’ more than four decades of industry experience, noting the firm is “deeply committed to serving the unique needs of small business retirement plans.” The transaction is expected to close in the third quarter of 2024, and the acquired business will operate as part of the Ascensus Retirement line of business.
