Compliance April 15, 2008

Mercer Loses Evidentiary Issue in Milwaukee DB Advice Suit

April 15, 2008 (PLANSPONSOR.com) - A federal judge hearing a lawsuit by Milwaukee County over the quality of Mercer's advice on its defined benefit pension plan has turned away Mercer's efforts to bring evidence into the case of potential county pension wrongdoing.
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A news report in the Milwaukee Journal Sentinel said U.S. District Judge Charles Clevert of the U.S. District Court for the Eastern District of Wisconsin ruled that Mercer’s request was filed after the legal deadline for such requests.

Even though Mercer had advised the county about its pension buyback program, the consultant now argues the program illustrates a pattern of pension mismanagement on the county’s part. The buybacks allowed hundreds of county workers to add to their pensions by purchasing credit for time worked decades earlier during part-time or seasonal jobs, the news report said.

In 2006, the county sued Mercer, claiming its advice on the 2001 pension perks amounted to malpractice, and seeking damages of at least $100 million (See  Milwaukee Board Hits Mercer with Pension Lawsuit ). The county says its costs on the deal will eventually exceed $600 million, a figure Mercer calls “highly suspect,” the newspaper reported.

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