A big news story over the Canadian Thanksgiving weekend, consulting giant Mercer is to pull out of the public DB market in the U.S. The firm cites “changes in the public fund marketplace.”
(From Global Pensions) Mercer is to cease providing investment consulting services to public sector defined benefit schemes in the US.
The firm said the decision was made following a comprehensive review of its business and in light of changes in the public fund marketplace.
It will continue to provide consulting for public sector defined contribution schemes and its specialist consulting services, such as responsible investment; Sentinel services used to evaluate operational risks, and alternative investments through its research boutiques, will not be affected.
“Mercer’s plans to refocus its investment consulting services only impact public sector defined benefit plans, and do not affect other services that Mercer may be providing to these plans,” the company said in a statement.
“As always, Mercer is committed to the highest standards of professionalism and integrity, and believes the focus on a narrower set of investment consulting services to public sector pension plans will enable the firm to serve its public sector clients even better.
“Mercer Investment Consulting is committed to making the transition as smooth and seamless as possible for our clients affected by this change. We will be working with our defined benefit clients to help ensure a transition period so that they can identify another investment consulting firm that can perform defined benefit investment consulting advisory services.”
In June Mercer agreed to pay US$500m to settle a law suit brought by the Alaska Retirement Management Board alleging the actuarial firm erred when calculating the state’s pension liability.
In a statement, Mercer said settling was in the firm’s best interest because of “the uncertainty of the outcome of a jury trial in Juneau, with its high concentration of plan participants; the complex technical nature of the claims; and the fact that the plaintiffs were seeking at least $2.8bn in damages”. Read the full article.