Economy
As dozens of Tasmanian RBF jobs go … meet RBF’s new best friend …
BACKGROUND
THE Retirement Benefits Fund, which manages superannuation for more than 75,000 state public servants, will axe nearly half its staff and send the work interstate.
Previously it was believed the outsourcing of much of its administrative work would cause just 35 redundancies.
But yesterday fund CEO Philip Mussared confirmed about 85 jobs from a total 190 positions would be affected.
RBF is transferring its member administration, member contact and some communication functions to Mercer (Australia) Pty Ltd.
Mr Mussared said about half of the 85 redundancies would receive payouts under the normal redundancy provisions and they would take their redundancies between the end of April and June 30.
“The other half are staff employed, since the decision to explore outsourcing, on contract to June 30, 2011 including project staff finishing their employment with RBF at the end of June 2011,” he said. Mr Mussared said all affected RBF staff had been advised of the extent of changes resulting from outsourcing, their individual status, their entitlements and the support which was available to them during the transition period.
The original estimate of job cuts in 2008 had been made without a full assessment of the range of activities to be outsourced or the subsequent impact on the entire business.
That assessment had now been completed.
Last December RBF said the transition of its operations to Mercer was on schedule for completion by June this year.
Mr Mussared said the main benefit from outsourcing would be from minimising risks associated with the RBF’s ageing information technology-based administration system.
FOREGROUND
Here’s what I dug up about RBF’s new friends, Mercer (Australia), and their parent company Marsh & McLennan. (It took 5 minutes):
From Mercer (Australia) website – About Mercer
Mercer is the global leader for trusted HR and related financial advice, products and services. In our work with clients, we make a positive impact on the world every day. We do this by enhancing the financial and retirement security, health, productivity and employment relationships of the global workforce.
Mercer has more than 18,000 employees serving clients in over 180 cities and 40 countries and territories worldwide.
As a wholly owned subsidiary of Marsh & McLennan Companies, Inc., we can also provide access to the complementary services of our sibling companies, Marsh, Guy Carpenter and Oliver Wyman.
www.mercer.com.au/aboutmercer.htm
Reuters:
Alaska, Mercer settle pensions lawsuit
Fri Jun 11, 2010 9:56pm EDT
* Mercer does not admit wrongdoing as part of settlement
* Mercer says $100 mln of settlement covered by insurance
By Yereth Rosen and Elinor Comlay
ANCHORAGE, Alaska/NEW YORK, June 11 (Reuters) – Consulting business Mercer, owned by Marsh & McLennan (MMC.N), agreed to pay $500 million to Alaska to settle a lawsuit over the state’s unfunded employee pension plans, Mercer and Alaska’s Attorney General Daniel Sullivan said on Friday.
The state had sought as much as $2.8 billion in a lawsuit, first filed in December 2007, that accused Mercer of making several errors in calculating employee pension and health-care obligations.
“We think this is a fantastic settlement,” Sullivan said in an Anchorage news conference. “This is, as far as we know, by far the largest actuarial settlement that has occurred in the country.”
Most of the proceeds from the settlement will be funneled into its pension funds, with almost $100 million going to pay legal costs, Sullivan said.
In a separate statement, Mercer said $100 million of its payout to the state will be covered by insurance.
Mercer did not admit any wrongdoing as part of the settlement, Sullivan said.
“You look at the amount (of the settlement), I think in many ways it speaks for itself,” Sullivan said.
The payment is due in 60 days, he said.
The lawsuit, filed by the Alaska Retirement Management Board on behalf of the state’s two largest public-employee pension systems, accused Mercer of engaging in actuarial misconduct, breach of professional duty and breach of contract. The original complaint sought $1.8 billion, but an amended complaint filed last year accused Mercer of deliberately concealing its errors and boosted the state’s claim to $2.8 billion.
The case was scheduled to go to trial in Juneau on July 6.
“I believe we had a very strong case against Mercer. But trials, as you know, have risks,” Sullivan said.
Alaska’s unfunded pension liability totals about $8.9 billion, Assistant Attorney General Mike Barnhill said at the news conference.
Insurance Journal:
Marsh & McLennan Settles Pension Plans’ Suit for $400 Million
November 16, 2009
Insurance broker Marsh & McLennan Cos. Inc. will pay $400 million as part of a class action settlement filed five years ago by state pension plan administrators in New Jersey and Ohio in connection with a probe of the company’s acceptance of contingent commissions.
Marsh & McLennan admitted no wrongdoing or liability as part of the settlement, which has already received preliminary approval by a federal judge in New York.
The lead plaintiffs in the suit – the New Jersey Division of Investment, Public Employees Retirement System of Ohio, State Teachers Retirement System of Ohio and the Ohio Bureau of Workers’ Compensation – alleged that Marsh & Mclennan broke federal securities laws by misrepresenting the nature of its contingent commission revenue.
The price of Marsh & McLennan stock dropped significantly when information was disclosed correcting the alleged misrepresentations and omissions, triggering a significant investment loss for plans overseen by those groups.
“This is a substantial agreement that settles the claims we raised against Marsh in our suit to recover investment funds lost by our pension fund,” New Jersey Attorney General Anne Milgram said. “We also believe the settlement best serves the interests of class members.”
Ohio Attorney General Richard Cordray said “Marsh harmed the investments and retirement benefits of workers in Ohio and across the country. This massive fraud was built on unethical and illegal practices and violated the best interests of clients and shareholders alike. By serving as counsel to the lead plaintiff in the case, we were able to make sure that Marsh is held accountable and that workers, families and investors, including many in Ohio, are compensated for their losses.”
Marsh & McLennan said it expects about $205 million of the settlement will be covered by insurance, with the remainder to be paid with cash on hand.
“After more than five years of litigation, (the company) believes these settlements to be in the best interest of the company and its stockholders,” the company said in a release. “While the company continues to deny all of the claims in these lawsuits, the resolution of these matters puts the litigation arising from the events of 2004 largely behind us and reduces the company’s ongoing legal costs. (Marsh & McLennan) is focused on the future and further strengthening its world-class businesses.”
A final approval hearing is scheduled for December 23.
Separately, the company also announced that the ERISA class action lawsuit filed in 2004 in the U.S. District Court for the Southern District of New York has been settled for $35 million, $25 million of which will be covered by insurance.
Earlier RBF decisions: Airport investment writedown …