Press Release

Announcement of Proposed US Expansion

Issued by PensionBee

Mar. 4, 2024

PensionBee Group plc, a leading online pension provider, today announces it has entered into an exclusive, non-binding term sheet with a large, US-based global financial institution in order to expand into the United States of America (‘US’). The US has the world’s largest Defined Contribution pension market, representing approximately 80% of the global total and $22.5 trillion in assets.(1)

Under the proposed strategic relationship, PensionBee will deliver the US service through PensionBee Inc, to be established in Delaware as a wholly-owned subsidiary of PensionBee Group plc, with operational headquarters in New York. PensionBee will manage the operations of the US business, including the hiring of a local team, making available its award-winning online retirement proposition and UK-based proprietary technology to consumers in the US Defined Contribution market. PensionBee will enable US consumers to easily consolidate and roll over their 401(k) plans into a new Individual Retirement Account (‘IRA’).(2)

The US-based partner will provide its expertise and substantial marketing funding. Correspondingly, PensionBee’s financial contribution will be financed from the existing resources of PensionBee Group plc.

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

In the UK, following close to a decade of operations, PensionBee will continue to grow its market share in the £1 trillion Defined Contribution pension market in accordance with current guidance on revenue growth and profitability, operating the UK business as financially separate to the US undertaking. As at the end of 2023, PensionBee had £4.4 billion of Assets Under Administration on behalf of approximately one quarter of a million Invested Customers.(3) PensionBee achieved ongoing Adjusted EBITDA profitability at the end of 2023 and expects to be profitable in the UK on an Adjusted EBITDA basis for the full 2024 financial year.(4)

Given the context of the enormous US market opportunity, PensionBee sees the potential for its US business to grow rapidly, becoming at least the size of its UK business over the next decade.

Romi Savova, CEO of PensionBee, commented: “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. This is a transformative step for PensionBee and for our stakeholders.By entering the world’s largest Defined Contribution 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.”

Footnotes

1. Investment Company Institute, “Release: Quarterly Retirement Market Data” as at 13 December, 2023. Includes the sum of Defined Contribution Plans and IRAs.

2. A 401k is an employer-sponsored Defined Contribution retirement plan into which employees can contribute and into which employers may also make matching contributions. An individual retirement account (‘IRA’) is a tax-advantaged retirement savings account into which an individual can contribute either pre- or post-tax money and which grows on either a tax-deferred or tax-free basis.

3. Assets under Administration means the total invested value of pension assets within PensionBee Invested Customers’ pensions. It measures the new inflows less the outflows and records a change in the market value of the assets. Invested Customers means those customers who have transferred pension assets or made contributions into one of PensionBee’s investment plans.

4. Adjusted EBITDA is the profit or loss for the period before taxation, finance costs, depreciation, share based compensation and transaction costs.

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