The Hartford's Retirement Business Sale: Bad News For Jobs?


The Hartford is selling its retirement plans business to MassMutual for $400 million, and that is not good news for jobs in the region.

The hope was that a company not already in the 401(k) business would want to get into it — preferably an outfit from far away that didn't already have a base of people in the Hartford area.

That would have raised more hope for the 700 Connecticut people at The Hartford Financial Services Group who are in the company's retirement business, mostly in Simsbury and Windsor.

As it is, when the deal closes in the next couple of months they will join a stable company, owned by its customers, which has shown strong growth in its own retirement business. So it's not necessarily bad.

MassMutual has maintained its personnel through the recession, about 3,400 employees in Springfield and nearly 2,000 in Enfield. Not having to satisfy Wall Street every three months gives the company the space to take a long-term outlook — precisely what Liam McGee could not do earlier this year when billionaire investor John Paulson pressured him to break up the company.

The Hartford, for its part, had a long history of maintaining huge staffing in its headquarters region until the company's investment side melted down in 2008, and in some ways the company still clings to that culture as a virtue. It would like to do well by its employees as it sells three major businesses and runs off its annuity business.

But survival is survival, and we can't expect McGee to reject deals that don't come with a promise of employment for his people. And MassMutual already has 1,200 people in its retirement plans business, in Springfield.

I spoke to a source familiar with insurance operations in the region, who guessed that hundreds of jobs at The Hartford could be at direct risk.

"It's going to pretty bad in terms of the people," said he source, who's not involved in the deal.

It would be one thing if the economy were growing and Mass Mutual were able to absorb the added people. Instead, across the economy, and probably here as well, we have companies hunkering down, buying books of business and hoping to meld them into the workloads of their existing staffs.

Worse still, in this case, the marketing and administrative expertise is similar, even though The Hartford specializes in small and midsize firms and MassMutual tends to have larger companies on its roster.

Executives at Massachusetts Mutual life Insurance Co. aren't saying what the integration will look like, nor could they at this point. But the combination will catapult the firm to $120 billion in retirement plan assets under management, putting it near the top 10 in an industry that includes giants such as Prudential and Fidelity.

"It's going to be designed to create a premier retirement services business," MassMutual spokesman Mark Cybulski said.

It's happening at a time when job gains in central Connecticut have been hard-won, three years into the recovery. The private sector has outpaced government but remains lukewarm at well under 1 percent growth per year, and forecasts call for no improvement in the next two years.

The history of these deals is mixed for employees. ING kept most of the old Aetna folks after its 2001 acquisition of Aetna Financial Services, for example, and MetLife has maintained the old Travelers Life & Annuity staff.

But there are plenty of mergers that go the other way. In 1995, I interviewed David E. Sams, CEO of the old Connecticut Mutual Life Insurance Co., on the day the firm agreed to be bought by MassMutual. The promise: Connecticut Mutual would keep more than two-thirds of its 1,650 jobs. The stately headquarters on Garden Street, with its Corinthian columns, would remain a company co-headquarters.

We all know what happened, and it was not anything close to that.

"Until the economy grows, you can't see them taking on new people," said the insurance industry source I spoke with. "If I were sitting at the Hartford now I'd be a little nervous."

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