Frequently Asked Questions

What services does OCM provide?

OCM provides retirement, ERISA-qualified Plans, and other Institutional Investors with products and services, including Model Portfolios. Our specialty is that we also will serve as a plan's 3(38) fiduciary, which makes us solely responsible and liable for investment decisions concerning the selection, monitoring and replacement of plan investment options. OCM functions as the fiduciary with respect to all activities typically associated with managing the investment of the assets of a plan. In the case of an independent assignment, OCM assumes fiduciary responsibility for making certain specific decisions on behalf of the plan.

What does OCM actually do as an Investment Named Fiduciary?

Our work begins with an assessment of a plan's actuarial liabilities and funding projections, which will lead to a review and potential revision of a plan's investment policy statement. Based upon the Investment Policy Statement, OCM, if appropriate, collaborates with the plan's consultants to review and revise asset allocation plans, rebalancing policies, and risk control standards. We also review, identify and select eligible asset categories, managers, strategies and consultants for the plan. Finally, OCM will perform the critical fiduciary function of providing model portfolios as investment selections.

In addition, OCM will review and negotiate third party vendor agreements on behalf of the plan. This includes agreements with trustees, record keepers, and administrators. Based upon their years of industry experience, the OCM team is highly skilled in negotiating these agreements. While reviewing these agreements may not typically be viewed as named fiduciary activities, these services are a significant component of our value proposition and are consistent with the ERISA requirement to keep plan expenses as low as possible.

What's the difference between OCM and other plan consultants and service providers?

We are fundamentally different that most other investment consultants. First, investment consultants have traditionally avoided fiduciary status. OCM provides fiduciary services directly. Many firms such as trust banks, investment consultants and investment managers approach pension engagements either from the perspective of a fiduciary or from the perspective of an investment professional. OCM integrates these two disciplines and readily accepts fiduciary duties.

Won't OCM simply be adding another layer of expense on top of the plan?

It is likely OCM will generate cost savings well beyond its fees. In addition to negotiating fee arrangements with service providers, we will implement a coherent and cost efficient investment structure for plans. We eliminate needless complexity and negotiate fees aggressively with investment managers to create the optimal framework for achieving plan investment objectives net of costs.

How can OCM claim to be a prudent expert?

Our team has extensive experience creating asset allocation models for 401(k), 403(b), Non-Qualified Deferred Compensation, and Defined Benefit plans. Moreover, we understand fiduciary responsibility - investment, legal and corporate governance.

How does OCM charge for its services?

We charge a percentage on the total assets in the plan.

What is a fiduciary?

Any person, committee or organization that exercises any discretionary authority or discretionary control respecting management of a plan or exercises any authority respecting management or disposition of the assets of a plan may be considered a fiduciary. Investment managers are fiduciaries. In addition, anyone with discretionary authority over the administration of an ERISA qualified plan would also be a fiduciary.

How are the actions of the named fiduciary judged?

ERISA establishes a number of standards against which a fiduciary's behavior and judgment is evaluated. Fiduciaries must act solely in the interest of the plan participants and exclusively for the purpose of providing pension benefits to the plan participants. Fiduciaries must avoid any conflicts of interest and they must act as prudent experts when making decisions. Fiduciaries must also reasonably defray expenses of the plan and diversify the assets of the plan.

What kind of liability do named fiduciaries have?

ERISA imposes personal liability on a fiduciary for breach of fiduciary duty. A fiduciary, in certain circumstances can also have co-fiduciary liability for the acts or omissions of other fiduciaries.

What do named fiduciaries do?

The Investment Named Fiduciary is responsible for all aspects of investing the plan assets. These tasks include

1. Establishing the overall strategic asset allocation for the plan
2. Using Model Portfolios for plan participant investment selections and as a QDIA.
3. Implementing the allocation of plan assets among different asset classes and investment managers

Does the Investment Named Fiduciary have the discretion to either increase or decrease the investment risk in the portfolio?

Yes. The Investment Named Fiduciary retains the authority to make adjustments to the risk profile of the plan's investment portfolio.

What prevents an Investment Named Fiduciary from implementing either too much or too little risk in the portfolio?

The Fiduciary must make all of its decisions in its capacity as a prudent expert. All investment decisions related to the risk profile of the portfolio will be judged against this standard. Once the investment return assumptions are established, then the portfolio's risk profile should be consistent with these return objectives. Too much or too little risk may be viewed as not prudent and therefore could invite allegations of breach of fiduciary duty.