Mercer paid $45 million to the Milwaukee County Employees’ Retirement System to settle charges that the company was negligent in actuarial consulting work involving the cost of a pension benefit option.
The firm paid the settlement in cash on Tuesday, Mercer spokesman Charles Salmans said in an interview.
Mercer agreed to settle two weeks into the trial, which began May 4 before Chief U.S. District Court Judge Charles N. Clevert in Milwaukee, said Kenneth E. McNeil, attorney with Susman Godfrey, which represented the $1.1 billion pension fund, in an interview. With the settlement, Mr. Clevert dismissed the suit.
In the case, Mercer estimated the present value of the pension benefit package adopted for 2000-2001 was $75 million, while the Milwaukee fund estimated it at $200 million, Mr. McNeil said.
The case was begun by William Domina, Milwaukee County corporation counsel, who initiated a national search for a law firm to handle the suit leading to the selection of Susman Godfrey, Mr. Domina said in an interview.
Mercer, which had been the actuarial consultant for the county, also had been the system’s investment consultant “but not concurrently with its actuarial work, which was the subject of the suit,” Mr. Salmans said. Its “investment consulting wasn’t an issue in the case,” he said.
“As part of the settlement, Mercer acknowledges no wrongdoing in this matter and, in fact, continues to believe that the lawsuit was without merit,” according to a Mercer statement. “From the outset of this litigation, we have strongly believed that the quality of our work on behalf of Milwaukee County met all applicable professional standards. However, given the uncertainty of trial outcomes involving complex technical matters, we believe that reaching a resolution was prudent and in the best interest of our shareholders, clients and employees.”
