Robert Leggett, deputy commissioner of investments, said the system periodically bids out all contracts.
Mercer was retained, partly to help implement an asset allocation study it recently completed, Mr. Leggett said.
All three plans administered by the system, now managed with different asset allocation targets, will be standardized and will use the same asset allocation.
The allocation to cash equivalents, managed internally, will be reduced to 3% from 5%. Real estate allocations will drop to 5% from 10% of total assets. The target allocation to large-cap equities will rise to 55% and small-cap equities to 10%.
Small- and large-cap stocks now meet the new targets and will be maintained at these levels, said Mr. Leggett.