Great-West, Putnam to Combine Retirement Businesses

Putnam Investments and Great-West Financial will remain distinct entities after the move for other lines of business, but the combined retirement entity will operate solely under the Great-West Financial organization. The retirement-related staff at both firms will remain in their respective home-office locations—Denver for Great-West and Boston for Putnam.

Executives from across Great-West Lifeco explained the move will not include an immediate merger of the Great-West and Putnam brands, even within the retirement space, where resources and systems will be actively combined over time. The move should also have little noticeable effect in the short term for plan sponsor and participant clients of either company, they said, as the client servicing staff for both Great-West Financial and Putnam will continue in their current capacities.

Firm executives stressed that the move will not lead to staff reductions at either firm—and will instead likely lead to a pickup in hiring as new opportunities arise for the combined entity.

Great-West Lifeco Inc. also announced it has appointed Robert Reynolds, who is currently president and CEO of Putnam Investments, as president and CEO of Great-West Lifeco U.S. Inc., the holding company that directly owns both Great-West Financial and Putnam Investments (see “Former Fidelity COO to Lead Putnam Investments”). Reynolds will also assume the role of president and CEO of Great-West Financial upon the retirement of Mitchell Graye in May 2014, putting him at the head of both Great-West Lifeco U.S. and its two subsidiaries companies.

Moving forward, the heads of both Putnam’s and Great-West’s retirement services will remain in their current roles and will report directly to Reynolds.

Charlie Nelson, who leads Great-West’s retirement business, has been put in charge of the effort to merge the two retirement businesses’ existing systems and staff over time. The vision is that Great-West will continue to serve strongly in the small and mid-sized 401(k) plan market—as well as in the government 457 and non-profit 403(b) plan markets. Putnam resources will continue to serve clients and pursue growth opportunities in the large and mega 401(k) plan space. Edmund Murphy will continue to lead the defined contribution retirement plan business at Putnam as he supports and collaborates with Nelson in the long-term effort to merge the two retirement groups.

Reynolds said the effort should be made simpler by the fact that both companies already operate on the same back end systems and software for delivering retirement services. More differences exist in the front-end operations of the two retirement groups, Reynolds said, so he has directed Nelson and Murphy to explore ways to unify and improve the experience of plan sponsor and participant clients. But that end-stage is still some ways off, he said.

The combined retirement entity will cover about $220 billion in total assets under advisement (AUA), Reynolds said, and will be the service provider for some 5 million plan participants across the 401(k), 403(b) and 457 plan markets.

Reynolds is also a member of Putnam Investments’ Board of Directors, and President of the Putnam Funds organization. Before joining Putnam Investments in 2008, he spent nearly 24 years at Fidelity Investments, serving as vice chairman and chief operating officer from 2000 to 2007 (see “Reynolds Steps Down after 23-Year Fidelity Career”). Reynolds earned a B.S. in business administration and finance from West Virginia University.

Reynolds was awarded PLANSPONSOR’s Lifetime Achievement Award in 2005, and was identified as a key industry figure of the past decade in PLANSPONSOR’s Tenth Anniversary issue.

Nelson received the 2014 Lifetime Achievement Award, which was presented earlier in March at the PLANSPONSOR/PLANADVISER Awards for Excellence Dinner.