Retirement Plans

Retirement Plans

Independent Consulting & Fiduciary Investment Management

O’Brien Greene & Co. has provided independent investment management and consulting services to employer sponsored retirement plans—defined benefit pensions as well as defined contribution plans (e.g., 401(k)s and 403(b)s)—for over forty years.

By serving plan sponsors as an ERISA 3(38) investment fiduciary, O’Brien Greene helps companies to optimize their employees’ retirement benefit and eliminate the bewildering complexity and hidden fees that often plague conventional defined contribution retirement plans.  O’Brien Greene has the flexibility and experience to meet each employer’s distinctive needs for its retirement plan, whether this involves taking a discretionary management role and providing customized plan investment options, or serving in a consulting capacity to select and oversee a platform of third-party funds and provide advice about recordkeeping and administrative services.

Mitigating Corporate & Personal Liability

The corporate sponsors of retirement plans have a fiduciary duty under ERISA law to design and operate those plans’ in the best interests of their employees.  This liability extends personally to corporate officers and directors when they exercise discretion over their retirement plan.  Without professional help from an independent, SEC-registered investment advisor, however, few employers have the time or expertise to meet this burden.

O’Brien Greene ensures that its clients’ retirement plans are free of excessive or hidden fees and conflicts of interest, while offering high-quality investment options at a reasonable cost.  By eliminating overpriced funds and unjustified “revenue sharing” arrangements between a retirement plan’s various providers, O’Brien Greene has regularly been able to reduce its clients’ overall plan fees by 50% or more, while simultaneously increasing the quality and transparency of plan operations.

The complexity and cost of many conventional retirement plans can prevent employees from building up the savings they need to retire. Furthermore, employers have become increasingly exposed to class-action litigation when the retirement plans they sponsor burden their employees with excessive fees or conflicted investment advice.

O’Brien Greene’s approach to 401(k) plans maximizes employee savings, reduces plan costs, eliminates hidden fees, and mitigates employer plan sponsor liability.

Conventional 401(k) and 403(b) plans have dozens of pages of fine print disclosing conflicts of interest between the insurance company, bank, or mutual fund company that provides the plan and the employer plan sponsors they are meant to serve. O’Brien Greene never has to “disclose” such conflicts, however, because we don’t have any. We don’t accept any “revenue sharing” or sales commissions from any of the investments we recommend or from any of the independent recordkeeping and administrative firms we work with.

Choose one of the headings below to learn more about the advantages of O’Brien Greene’s retirement plan solutions.

Professional Investment Management

The stewardship of retirement savings is too important a task to improvise. Yet improvisation is just what the do-it-yourself mutual fund platform requires, even though most people don’t have the time, professional training, or access to information that are all necessary in order to research prospective investments, allocate assets, and continuously monitor holdings. It’s unreasonable to expect someone to work all day as an attorney, machinist, or consultant, for example, and become a self-taught investment manager in the evening, picking funds online. As a result, savers end up with asset allocations that don’t fit their true investment profile, they direct contributions into exotic, attractively-named funds that charge outrageous fees, or most often, contributions sit idle in cash due to inertia.

The average mutual fund investor performs much more poorly than the average mutual fund. For example, from 1991 to 2010 the average stock mutual fund had an average annualized return of 9.9%, according to a study by Davis Advisors. But the average mutual fund investor earned only 3.8% annually during that time.

O’Brien Greene’s alternative approach works to avoid these common behavioral pitfalls with customized, advisor-managed account solutions and qualified investment default alternatives (QDIAs).

Genuine Fidiciary Responsibility

Similar-sounding job titles proliferate in the financial industry: investment advisor, asset manager, financial advisor, wealth manager, etc. But beneath all of the confusing titles, there are salesmen of financial products and there are stewards of investors’ savings. Both salesmen and stewards have essential roles to play in financial markets, but investors need to know the difference between them. Salesmen are compensated when you buy their products, regardless of how those products perform; stewards of savings are compensated when those savings grow.

The trouble with the 401(k) marketplace is that it encourages employers to confuse the roles of salesman and steward. Employer retirement plan sponsors have a fiduciary responsibility to act in their employees’ best interests in designing and administering a 401(k) plan. But most of the insurance companies, banks, and mutual funds companies that provide 401(k) plans operate under a lower “suitability” standard that doesn’t legally require acting in their clients’ best interest. In other words, the conventional retirement plan provider is a salesman, but the employer plan sponsor needs a steward.

Financial Times LogoLarge US corporations in the dock over retirement plans

“…MassMutual, the US insurer, became the latest target of dozens of lawsuits…. Caterpillar, the heavy machinery manufacturer, was the first to settle in 2009 for $16.5m. General Dynamics, The Hartford, Bechtel, Walmart and Kraft have also reached settlements in recent years. The biggest settlements yet came earlier this year, when Cigna, the health insurer, agreed to pay $35m, and International Paper $30m.”

The cases allege the companies breached their fiduciary duties to participants in their 401(k) plans, and claim the plans engaged in improper revenue-sharing arrangements with service providers.

December 13, 2013

Because O’Brien Greene is a pure fiduciary (as defined by the Investment Advisors Act of 1940 and regulated by the U.S. Securities & Exchange Commission), we are distinctly suited to help employer retirement plan sponsors discharge their own fiduciary duty to their employees.  We specialize in serving as an ERISA §3(38) fiduciary manager on behalf of plan sponsors and their employees.

It’s no longer possible for employers to discharge their fiduciary duty by simply going with the herd, hiring a nationally-known plan provider, and forgetting about it. New fee disclosure regulations for 401(k) plans from the Department of Labor in 2012 have set off a wave of employee-benefits litigation, with hundreds of millions of dollars at stake. By working with a pure fiduciary such as O’Brien Greene, employers can help preempt such litigation risks before they become a reality.

Institutional Investors Deserve Institutional Pricing

Many retirement plans have sufficient assets to be considered institutional-sized investors, but they nevertheless receive retail pricing from their plan providers.  The effects of higher fees on an investment portfolio can be debilitating.

Department of Labor LogoA Look at 401(k) Plan Fees

“A 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent.”                 

U.S. Department of Labor
(October 2010)

O’Brien Greene ensures that its retirement plan clients receive the best pricing for fund investment options that their status demands, and provides customized separate account portfolios at notably competitive rates.


O’Brien Greene is an independent firm owned entirely by its management. This means that our clients know exactly who they’re working with, unlike many financial services firms, which maintain complex subsidiary relationships between their investment advisory, brokerage, custodial, and insurance operations. When O’Brien Greene invests the assets of a 401(k) plan client, we arrange for recordkeeping services to be provided by an established, independent recordkeeping firm. The recordkeeper charges a dollar fee fixed per active retirement plan participant, not as a percentage of assets under management, and O’Brien Greene does not “share” any of this revenue. This fee structure is crucial, because the recordkeeping costs of administering a 401(k) plan are a function of the number of plan participants, not the size of invested assets. One indicator of an overpriced 401(k) plan is a recordkeeping fee that is fixed to a percentage of plan assets rather than the number of active plan participants.

Transparent Ownership of Assets

Many retirement plans interpose needlessly complex layers of financial product in between the investor and the underlying investments. When employees invest their savings through a retirement plan managed by O’Brien Greene, it is easy to know exactly what is owned and why. This simplicity and transparency of ownership both reduces risk to the employees and increases the accountability of our investment team to our clients.

Institutional Investor LogoRetirement Plan Fee Disclosure: A Game of Hide-and-Seek

“Department of Labor regulations stipulate that fees on 401(k) plans be ‘reasonable’, but sponsors still report high, hidden costs.”

February 13, 2014

When insurance companies offer retirement plans, by contrast, most employer sponsors and employee participants don’t realize that all of their assets may be aggregated into a group annuity contract and the mutual funds they “choose” are in fact owned by the insurance company who provides the plan. This extra layer of insurance product that mediates between savers and their assets can also embed significant “wrap fees,” over and above the disclosed mutual fund fees, that the plan provider uses to compensate the insurance brokers who sell their retirement plans.

Separately Managed Account Portfolios, Mutual Funds, or Collective Investment Trusts

Whether as a consultant to a retirement plan or as a discretionary investment manager for a plan, O’Brien Greene  will recommend the investment vehicle that’s optimal for each corporate plan sponsor’s situation, which include daily valued, separately managed portfolios of individual stocks and bonds directly managed by O’Brien Greene, or third-party mutual funds and collective investment trusts.

Retirement Plan Commentary

Read ongoing commentary about retirement investing from our blog.