According to a press release, Horizon Actuarial Services in the U.S. and PBI Actuarial Consultants in Canada will be owned and operated by current Watson Wyatt associates. These associates, who focus on multi-employer plans, will move to the new companies over the next several months.
Watson Wyatt will have no ownership stake in either company, but will receive a percentage of the new companies’ revenues for the next five years, Watson Wyatt said.
The transition will affect approximately 70 multi-employer retirement clients, accounting for approximately $15 million in annual revenue.
“Multi-employer retirement work is a specialized area, better handled by a group of professionals dedicated specifically to that market,” said Gene Wickes, global director of benefits consulting at Watson Wyatt, in the press release. “Similar to our spinoff of public pension fund retirement work earlier this decade, this transition makes good strategic sense. It is consistent with Watson Wyatt’s focus on a core target market of the world’s leading companies and should also lower our risk profile in the long term.”
The transition is expected to be completed by January 31, 2008 and will result in a $0.03 to $0.05 reduction in the company’s fully diluted earnings per share in fiscal 2008. The company may incur up to $1 million in one-time restructuring charges, all in fiscal 2008, according to the announcement.
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