Principal to acquire ESOP business from Ascensus

Today, Principal Financial Group announced a definitive agreement with Ascensus to acquire its employee stock ownership plan (ESOP) business. At closing, Principal will add approximately 800 plans and more than 165,000 participants to its workplace savings and retirement solutions business that ranks as the No. 1 ESOP service provider in the U.S.¹

“Growth is an integral part of our retirement strategy at Principal, and we’re excited to add scale and deepen our expertise with the addition of experienced talent and solutions from Ascensus,” said Teresa Hassara, senior vice president of workplace savings and retirement solutions at Principal. “This acquisition strengthens the systems and capabilities that have made Principal a leader in retirement.”

Through this acquisition, Principal will gain full ownership of the ESOP recordkeeping business from Ascensus, along with its ESOP Economics consulting group and Telescope software. All products, clients, and employees will transition to Principal at the time of close, which is anticipated around the end of the second quarter of 2024. As Ascensus ESOP clients and participants are transitioned, they will be exposed to enhancements on the Principal recordkeeping platform such as digital access, support, and account management tools as well as audit process improvements to reduce time.

“After getting the opportunity to review Ascensus’ ESOP business more intimately, we found it to be very complementary to the expertise Principal has as a total retirement solutions provider,” said Andrew Matos, head of stock plan services for Retirement and Income Solutions at Principal. “The acquisition positions us to offer greater value, enhanced services, and stronger products to our ESOP clients, and the integration of strong talent from Ascensus will be essential to support the growth of our ESOP business.”

Commenting on the agreement, Ascensus president Nick Good said, “We have great respect for Principal, their expertise, and their commitment to serving their clients with excellence. We’re confident that the valued client relationships and associates transitioning through this transaction will benefit greatly from the leadership, capabilities, and continued investment Principal has in the ESOP marketplace.”

Interest in ESOPs has grown in recent years as owners look to transition their businesses or become more competitive with talent recruitment and retention. In total, there are approximately 6,500 ESOPs in the U.S. after the number of newly created ESOPs increased 39% from 2020 to 2021². As of December 31, 2023, Principal and Ascensus were collectively serving more than 2,000 employee stock ownership plans and approximately 765,000 participants.