In its announcement news release , Marsh & McLennan Companies, Inc. (MMC) said the combined unit, which will have annual revenues of about $500 million, will offer defined benefit administration, defined contribution administration, health and group administration, and other human resources services.
Employees of both entities will become part of the new business, and there will be no immediate change to client accounts or business locations, MMC officials said. “We see this combination as an important opportunity to serve clients better in the changing and growing benefits and human resources market,” said Jeffrey Greenberg, chairman and chief executive officer of MMC. “By bringing together Putnam’s and Mercer’s strong benefits administration businesses into one cohesive human resources outsourcing organization, we will be able to deliver the total retirement outsourcing and other human resources solutions that our clients increasingly need.”
MMC said in its announcement that Brian Storms , the newly appointed vice chairman of Mercer Human Resource Consulting, will oversee the combined organization. The U.S. business will be led by Dave Carlson, current national practice leader for human resources outsourcing at Mercer Human Resource Consulting and formerly the chief executive officer and co-founder of Synhrgy HR Technologies, which was acquired by Mercer Human Resource Consulting earlier this year, the company said.
“We are committed to building on this exciting combination of compatible expertise, technology, and service excellence to contribute to our clients’ business success,” Carlson said in Tuesday’s news release. “By combining the strength of the two organizations, we will enhance our ability to provide flexible, customized solutions and high-quality service for each client’s unique human resources needs.”
Executives said Putnam personnel will continue working with other institutional and retail clients and advisors. “We at Putnam now see the business and market evolving to the point where our defined contribution clients will receive greater value if the administration of their retirement plans is handled by a total human resources organization,” said Ed Haldeman, chief executive officer and president.
More than most fund companies and retirement services providers, the Boston-based Putnam has been in the eye of the storm of the continuing federal/state mutual fund trading scandal that has focused primarily on market timing and late trading practices . Allegations against Putnam have led to the outflow of billion of dollars in client assets.
In April the firm agreed to pay $10 million in disgorgement and a $100 million penalty in agreements with the SEC and Massachusetts Secretary of State William Galvin to settle scandal charges. The sum represented the largest penalty yet, relative to actual harm done to customers (See Details Emerge About Putnam Settlement ). Further, unlike the other settlements surrounding market-timing and late-trading allegations, the Putnam settlement is the only one as of yet in which the firm admitted guilt.