The $25.8 billion Connecticut Retirement Plans & Trust Funds announced that Hewitt EnnisKnupp will replace Mercer as the pension plan’s new general investment consultant.
Hewitt EnnisKnupp and Russell Investments emerged as the two leading contenders after the pension plan issued a request for proposal (RFP) in December. Ten firms competed for the chance to advise the CT fund.
In October, Mercer announced that it was ending its offering of general consulting services to public defined benefit plans. Mercer’s decision to leave the industry was driven by a realization that working with public defined benefit plans exposed it to too much legal liability, aiCIO reported in its December issue.
In 2007, the Alaska Retirement Management Board slapped Mercer with a lawsuit seeking as much as $2.8 billion for unfunded liabilities. The Alaska fund alleged that Mercer’s lack of oversight dampened the ability of the retirement system to fulfill its obligations to former public employees. Principally, the suit accused Mercer of failing to disclose errors in calculations it made to determine how much the fund needed to set aside for health care and pension benefits. Mercer settled the lawsuit in June 2010 for $500 million.
Mercer’s contract with Connecticut Retirement Plans & Trust Funds expires June 30.
<p>To contact the <em>aiCIO</em> editor of this story: Benjamin Ruffel at <a href='mailto:bruffel@assetinternational.com'>bruffel@assetinternational.com</a> </p>