Thursday, October 23, 2008

Fidelity to transition its Canadian group retirement and savings plan record-keeping business to Great-West Life

Agreement represents $2.2 billion in assets

Great-West Life today announced that it has entered into an agreement with Fidelity Investments Canada ULC (Fidelity) whereby Fidelity will transition its Canadian group retirement and savings plan record-keeping business to Great-West Life, representing $2.2 billion in assets under administration. A link to the news release sent out earlier today is below.
The agreement includes approximately 100 plan sponsors, 470 group retirement plans and 95,000 members, and is effective immediately.

Great-West Life is very pleased to have been selected by Fidelity as the service provider for its Canadian clients. This transaction further solidifies Great-West Life’s position as a market leader in group retirement and savings plan administration, providing record-keeping services for 30 per cent of the capital accumulation plans in Canada.

Fidelity chose Great-West Life based on its commitment to client service, reputation for quality, and wide range of options for group retirement plan sponsors and plan members.
Over the months ahead Bill Kyle, Senior Vice-President, Group Retirement Services and his team will focus on ensuring a smooth transition for the plans currently served by Fidelity, and continuing to provide high quality service for Great-West Life’s existing group retirement plan sponsors and plan members.

A dedicated project team has been assigned to work on the transition of this business. As well, we anticipate some Fidelity administration and service staff will join our organization and continue their involvement with these clients to maintain continuity of service.

Group Retirement Services has significant expertise in managing large transactions, including the transfer of over 7,300 plans, 860,000 members and over $14 billion in assets to Great-West Life. This experience will help ensure a smooth transition for these clients.
Here is a link to the news release: http://www.greatwestlifeco.com/english/news/lifeco_10_22_2008.pdf
Some questions and answers follow.
How significant is this?
This transaction further solidifies Great-West Life’s position as a market leader in group retirement and savings plan administration, providing record-keeping services for 30 per cent of the capital accumulation plans in Canada.

How much will this increase our group retirement and savings business?
Prior to this agreement, our presence in the Canadian capital accumulation market represented nearly 17,000 plans and more than 1.1 million members. The Fidelity business to be transitioned to Great-West Life represents approximately $2.2 billion in assets under administration, and includes approximately 100 plan sponsors, 470 group retirement plans and 95,000 members.
This business represents growth of approximately 10 per cent for our capital accumulation plans.

How much did Great-West Life pay for this business?
The purchase price was not disclosed.

When do you expect the transition of this business to be complete?
We anticipate completing the transition by June 30, 2009.

Will Fidelity clients automatically transition to Great-West Life?
Great-West Life has been chosen by Fidelity as the service provider for this business and we will be working to ensure a smooth transition for these clients.

How many Fidelity staff will be joining our organization and where?
We anticipate adding staff from Fidelity – client relationship managers, customer service specialists and investment and retirement specialist positions -- however the number of positions has not yet been determined. Most of these positions would be located in our offices in Toronto.
Other Fidelity staff who work for the group retirement record keeping business will have the opportunity to apply for positions at Great-West Life and affiliated organizations as these positions become available.

Why did Great-West Life enter this agreement now?
We are always looking for opportunities to grow our business. This agreement is the result of ongoing discussions that have taken place over the past few months.

Has Great-West Life been affected by the continuing turmoil in financial markets?
Over a long period of time, our companies have maintained prudent and conservative investment policies and practices with respect to the management of their consolidated assets. Our balance sheets continue to be very strong, and we are well capitalized.

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