PensionBee has announced that it plans to expand its operations into the US defined contribution (DC) pensions market after it entered an exclusive, non-binding term sheet with a US-based global financial institution.

Through its proposed strategic relationship, the provider would deliver its US service through PensionBee Inc, which is to be established in Delaware as a wholly owned subsidiary of PensionBee Group, with operational headquarters to be stationed in New York.

The operations of the US business, including the hiring of local staff, will be managed by PensionBee, making its online retirement proposition and UK-based proprietary technology available to customers in the US DC pension market.

US consumers will be able to consolidate and roll over their 401(k) plans into a new Individual Retirement Account (IRA).

PensionBee’s US-based partner will provide its expertise and ‘substantial’ market funding, while PensionBee’s financial contribution will be met through its existing resources.

Entry into a final binding agreement in the strategic partnership is subject to confirmatory due diligence, legal documentation, and regulatory approvals, with launch expected to take place in late 2024.

PenionBee’s UK business will operate financially separate to its US business.

The US DC pension market is the largest in the world, with around US$22.5trn in assets, and PensionBee said it expected the size of its US business to be at least the same size as its UK business over the next decade.

"In the year of our 10th anniversary, having demonstrated underlying profitability, we have entered discussions with a view to deploying our award-winning customer proposition, supported by our innovative technology platform and marketing approach, in the United States of America,” commented PensionBee CEO, Romi Savova.

“This is a transformative step for PensionBee and for our stakeholders. By entering the world's largest DC pension market, where many consumers still struggle to prepare adequately for retirement amidst an array of confusing and difficult to use investment options, our straightforward approach to online retirement savings will help millions of consumers look forward to a happy retirement."

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