Charles Schwab has struck an agreement to buy Austin, Texas-based 401 (k) Company from Columbus, Ohio-based Nationwide Financial Services for $115 million in cash. The deal is expected to close at the end of the first quarter next year.
The 401 (k) company would join the Investor Services Enterprise, which includes Schwab’s Corporate & Retirement Services division.
“The 401 (k) Company has dedicated itself to providing retirement plan sponsors and employees with absolute quality and low-cost products and services, driven by a strong sense of entrepreneurial spirit and integrity. Like Schwab, it has recognized the importance of open investment architecture, fee transparency and client focus,” said Charles R. Schwab, chairman and CEO.
“Our clients are becoming increasingly involved in helping their employees plan for and achieve their retirement goals,” said Jerry Bramlett, president and CEO of the 401 (k) Company. “Schwab’ strong national corporate retirement and consumer brand adds tremendous strength to our message and our ability to help with those goals.”
“This transaction will enable our private sector business to focus on our core markets, which are small and micro 401(k) plans,” Nationwide said.
The 401(k) Company was founded over 20 years ago and offers defined contribution plan administration to more than 100 companies, serving 400,000 retirement plan participants around the country. The company's client assets total $21.7 billion.