Key Takeaways
- • Mercer has decided to stop providing investment consulting services to its 24 public U.S. defined benefit (DB) pension clients, according to Benefits Canada as cited by Pension Pulse.
- • Mercer says the decision follows "a comprehensive review of our business and in light of changes in the public fund marketplace," and is not directly related to two actuarial-services lawsuits it settled in the prior eighteen months, in which it denied liability.
- • Mercer will keep serving non-U.S. clients, Canadian clients, and private U.S. DB plans, and is working with public clients on transition periods to find replacement consultants.
- • The blogger questions whether the exit relates to Alaska Retirement Management Board allegations that Mercer underreported required pension contributions by more than $2.8 billion, but the source does not confirm any link.
Summary
Mercer is exiting U.S. public defined benefit investment consulting, according to a report by Benefits Canada that was republished on the Pension Pulse blog. The firm told its 24 public U.S. DB clients that it will no longer offer investment consulting services to them. Charles Salmans, partner and director of global public relations at Mercer, said the company is developing transition plans and wants the handover to be "as smooth as possible." A company statement said Mercer will work with affected clients over a transition period so they can identify another investment consulting firm capable of providing defined benefit advisory services.
Mercer attributed the decision to "a comprehensive review of our business and in light of changes in the public fund marketplace." Salmans indicated the move is not directly tied to two lawsuits involving Mercer's actuarial services that were settled over the last year and a half, and in both cases Mercer denied liability. The company said it "stands behind the professionalism and integrity" of its public-sector investment consulting work, but added that risk is one factor it weighs in business decisions.
Mercer's non-U.S. investment consulting business, its Canadian clients, and its private U.S. DB plan clients are not affected, according to the source. The Pension Pulse author speculates about a possible link to the Alaska Retirement Management Board's accusation that Mercer underreported the contributions required to fund Alaska's plans by more than $2.8 billion. That connection is the author's conjecture and is not confirmed by Mercer or the source material. The post also contains the author's broader criticism of investment consultants, a reader's response arguing that the critique was too broad, and an example involving Innocap's Martin Gagnon on managed account platforms.
Mercer attributed the decision to "a comprehensive review of our business and in light of changes in the public fund marketplace." Salmans indicated the move is not directly tied to two lawsuits involving Mercer's actuarial services that were settled over the last year and a half, and in both cases Mercer denied liability. The company said it "stands behind the professionalism and integrity" of its public-sector investment consulting work, but added that risk is one factor it weighs in business decisions.
Mercer's non-U.S. investment consulting business, its Canadian clients, and its private U.S. DB plan clients are not affected, according to the source. The Pension Pulse author speculates about a possible link to the Alaska Retirement Management Board's accusation that Mercer underreported the contributions required to fund Alaska's plans by more than $2.8 billion. That connection is the author's conjecture and is not confirmed by Mercer or the source material. The post also contains the author's broader criticism of investment consultants, a reader's response arguing that the critique was too broad, and an example involving Innocap's Martin Gagnon on managed account platforms.
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