Windsor, Conn.-based Voya Financial announced on Friday that it will purchase Pen-Cal Administrators, a nonqualified, deferred-compensation benefit plan provider and consultant.
Under the agreement, Pen-Cal will become part of Voya’s retirement unit. Voya will use the transaction to provide nonqualified services across its 401(k), 403(b) and 457 plan markets.
According to an announcement by Voya, the transaction is expected to close in the coming weeks. Additional terms of the transaction were not disclosed on Friday.
“This acquisition is an example of the investments we are making to facilitate growth in our businesses, and to expand the broad set of solutions we offer to enhance the client experience and improve financial outcomes for plan participants,” said Charlie Nelson, Voya Financial’s CEO of retirement and employee benefits, in a released comment. “The integration of these capabilities will also provide our plan advisor partners with the tools and resources they need to demonstrate greater value to their clients.”
The move shores up Voya’s retirement plan business at a time when the company has recently spun off a significant portion of its variable annuity and fixed-indexed annuity business. At the beginning of the year, the company announced that it would divest from its $35 billion closed block variable annuity business, selling it to a newly formed entity, Venerable Holdings. The company also plans to sell its $19 billion individual fixed and fixed-indexed annuity policies to Athene.
Pen-Cal has designed and administered deferred compensation plans for more than 50 years, with experience in consultative plan design support, sophisticated funding structures, call center support, website capabiltiies, plan administration services, trust services, recordkeeping, and employee enrollment, education and communications resources.
The nonqualified deferred compensation plan space targets executives and key employees interesting in supplementing savings within qualified plans by setting aside tax-deferred income.