Employees' Retirement System of Milwaukee County has filed a lawsuit against Mercer Human Resource Consulting that claims the consultant failed to adequately study the costs of a new employee benefit program, causing the fund to lose more than $100 million so far. The fund is asking for unspecified punitive damages plus "more than $100 million in excess" of the court's $75,000 jurisdictional minimum.
According to the suit, filed on Wednesday in U.S. District Court in Milwaukee, Mercer HR made "repeated, serious actuarial mistakes, grossly underestimated costs and totally failed to assess the actuarial effect" of a deferred retirement option plan it approved.
The system had $1.5 billion in assets as of December 2004, the latest date for which figures are available.
"Mercer has voluntarily cooperated with the many prior investigations related to the adoption in 2000 of the Milwaukee County pension benefits package," according to a company statement. "Mercer has never been found to have breached its responsibilities in any way."
Jack Hohrein, retirement services manager for the system, was available for comment at press time.