The Equitable Opportunity
Will Corebridge and Equitable Choose The Right Path?
In March 2026, two 403(b) behemoths announced a merger that shocked most of the 403(b) world. Corebridge (VALIC) and Equitable would merge, adopting the Equitable name. Combined, these companies will serve 12 million customers with over $1.5 trillion in assets under administration. More importantly, it would consolidate two of the largest players in the public K-12 403(b) marketplace.
Since the announcement, very little has been revealed about how this combined company will approach the non-ERISA public K-12 403(b) and 457(b) marketplace. Will the new company continue down the single vendor pathway that Corebridge had been forging, or double down on keeping the status quo of multiple vendors in school districts, the path Equitable has chosen? While it’s ultimately not up to this new company how school districts choose to operate their defined contribution plans, the influence the company wields, given its huge asset base, will certainly have an impact.
The real question is which philosophy will win out? Single or multiple vendors.
Sidebar: The difference between single and multi-vendor 403(b) plans?
Defined contribution retirement plans in the United States (401(k), ERISA 403(b), 457(b)) are overwhelmingly run by a single recordkeeper. That is, one entity provides all the services an employer requires to run its retirement plan effectively. These entities are referred to as “recordkeepers,” and they generally enable the employer to offer a diversified set of investment options from many different companies, all within one system. Non-ERISA K-12 403(b) plans have historically operated differently. These plans have generally had very little employer involvement in the investment decisions, and there is generally no federal fiduciary responsibility imposed on them, so they’ve basically operated as the wild west, pretty much anything goes. Instead of offering high-quality, vetted investment options, multiple-vendor plans offer low-quality, high-cost investment and savings options pitched by sales agents who are often predatory. It’s a system that benefits Wall Street at the expense of Main Street.
I believe this decision will determine whether the combined entity is even a player in the non-ERISA marketplace in twenty years.
The future of non-ERISA public K-12 403(b) and 457(b) defined contributions plans is not multi-vendor. Offering costly retail products to unsuspecting educators with little to no oversight is no longer acceptable, and this model, while still dominant, is losing steam quickly. Companies that cling to it will be seen for what they are: predators.
The writing is already on the wall.
School districts have been moving toward a single-vendor 403(b) for the past decade, and more districts are beginning to see the future of their retirement plans as the 457(b), not the 403(b). Focusing on high-margin retail products in the short term might help juice the stock price, but long-term shareholders will pay the price.
There is no publicly available data showing what the average market share of Equitable and Corebridge is in a typical district. This prevents us from digging into real-world scenarios. Still, we can create a hypothetical that demonstrates the mistake Equitable would be making by pushing multi-vendor plans over single-vendor plans.
If we grant an average participation rate of 30% (likely generous) in an average school district and assume that the new Equitable has 25% of all participants (also generous), 7.5% of employees would have an account. In a school district of 1,000 employees, that would be 75 participants. Those 75 participants are paying a pretty hefty cost to be with the new Equitable, at least 2% in all likelihood.
If this “average” district moved to a single vendor and Equitable won the bid, it would have 300 participants to sell products and services to instead of 75. If they did their job correctly and increased participation to just 40%, they’d have 400 participants available to develop relationships with potentially. I do not condone using the 403(b) and 457(b) as tools to sell other financial products, but I’m also not naive; that is the business model of these companies.
The future is likely to include automatic enrollment, which could push participation above 60%. Instead of working with 75 participants at a ridiculously high fee of 2%, they’ll have access to 600 potential participants to build relationships with and, if lucky, work with in the future.
Would you rather have 75 customers or potentially 600? Quality matters. The revenue from 600 participants may not be high enough to replace the revenue from 75 at first. Still, over time, the potential revenue stream will be dramatically higher.
Indeed, they would not win every single vendor bid. Still, they would have such an advantage in most districts (due to their currently large asset base across the country) that their odds of winning are significantly higher than those of the other companies in the marketplace. No one is better positioned.
The opportunity is huge.
If the new Equitable doesn’t pursue this strategy, it’ll still make a ton of money selling poorly designed products to unsuspecting educators. Still, they’ll be continuing to make the same mistake Equitable has made for decades - confusing revenue for respect.
The marketplace is moving toward a single vendor regardless of what Equitable does. If Equitable doesn’t participate in the next phase, they’ll be systematically locked out of the non-ERISA public K-12 403(b) and 457(b) marketplace. It’s already happening to them. It’s increasingly difficult for their salespeople to gain access to public school campuses. The new Equitable can continue down the path of multiple vendor plans and funding the lobbying entity that helps protect them (NTSA), but it’s just the proverbial rearranging of the deck chairs on the Titanic. The multi-vendor ship is sinking, and Equitable can either jump into a lifeboat or go down with it.