The state of Alaska filed a lawsuit against Mercer in state court in Juneau seeking $1.8 billion in damages, according to a release from Alaska Gov. Sarah Palins office. The suit claims Mercer miscalculated expected liabilities for the states $11.4 billion Public Employees Retirement System and $5.2 billion Teachers Retirement System, both overseen by the Alaska Retirement Management Board, Juneau.
A statement from Mercer said they would defend their work vigorously. To the extent the state has funding issues, they are caused by a number of economic factors, including skyrocketing medical costs, a downturn in the capital markets and the fact that employees are retiring earlier and living longer than anticipated, the statement said. Accordingly, beginning in 2002, Mercer advised the state to significantly increase its contributions to the retirement systems. The state is now attempting to hold Mercer accountable for these economic trends, over which our firm has no control.
The unfunded liabilities of those two plans totaled $8.4 billion on June 30, 2006, according to the state release.