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Defined benefit top priorities for 2021

What will be important this year? Defined benefit plans didn’t escape unscathed. But the upcoming transition to a new year offers an opportunity to re-evaluate our priorities and look ahead to the future.

  • 2021 DB top priorities
    A change of plans: top defined benefit issues for 2021
    The 11 considerations outlined in this paper address a range of topics, from the effects of COVID-19 to opportunities for diversification, rebalancing, and risk-transfer strategies.
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    2021 DB top priorities
  • Defined Benefit case study
    How Mercer’s OCIO reduced portfolio risk in 2020

    Learn how Mercer’s outsourced CIO (OCIO) platform and trading teams were able to protect one plan’s funded status during the turbulent markets of Q1 2020.

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    Defined Benefit case study
  • American Rescue Plan Act
    Implications for investment strategies and funding policies

    The newly signed American Rescue Plan Act (ARPA) contains provisions giving funding relief to single-employer defined benefit pension plans. 

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    American Rescue Plan Act

 

Register now – Webinar: 2021 Pension Risk Management | CFO Research Survey results - May 25 @ 2 pm ET

 

If you manage a defined benefit plan today, you know the realities and the risks you face. A volatile market. Uncertain liabilities. Regulatory complexity and change. Pressure to reduce volatility in contributions and expenses. We can help you navigate the defined benefit landscape — pivot on market conditions and seize opportunities while managing risk and cost.

Defined benefit retirement plans spectrum of services

Click on boxes below to read three different scenarios of how we can work with you.(1)

multi-user Do it myself
Tools and Research

• Client situation: Financial services client had an internal team that needed to supplement its expertise with research and quantitative tools.

• Mercer solution: Our MercerInsight® manager research database provided investment research, tracked records, trends and analytics.
 
• Results: This allowed the client to focus its time and resources in areas where it felt it could add the most value, while still providing broad coverage and information.

Advice

• Client situation: Consumer staples client had a legacy pension plan that it wanted to fund up as well as de-risk over time.

• Mercer solution: We provided guidance in terms of asset/liability strategy and helped implement a consistent, stable contribution policy and investment glidepath over time, along with funded status monitoring.
 
 • Results: Over the course of the relationship, the client was able to fund up the plan to over 100 percent funded, as well as take advantage of pension risk transfer opportunities in the marketplace to right size its liability profile.

OCIO Solutions

• Client situation: Energy client wanted to consider risks more strategically and look at the advantages of a bundled solution that would address both pension liabilities and assets together.

• Mercer solution: By combining actuarial services and investment services together, our fully delegated solution enabled the client to realize cost savings, reduce risk, use fewer resources and employ best practice governance.
 
• Results: The client went from paying $10.6M annually to $8M annually in combined fees.

multi-user Do it for me
Pension Risk Management and Transfer

pension risk management and transfer

Our specialized teams crossing actuarial and investment consulting offer an integrated approach to managing pension cost, size, and risk. Specifically, we are focused on investment-based solutions and pension risk transfer (either via lump sums or through annuity purchases with insurers).

Investments

Investments

Our investments team can create an optimal strategic plan to meet your growth objectives with an appropriate risk profile. We offer investment tools, advice, and delegation.

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Actuarial solutions

From plan funding, accounting, and government filings to also assisting with strategic initiatives related to plan design, financial strategy, and journey execution, we can help meet your critical actuarial needs. By linking actuarial insight and portfolio implementation, we can help you deliver better financial outcomes. Our broad actuarial, investment, and risk management experience offers our clients the advantage of building and executing truly integrated solutions.

Benefits for You and Your Plan

Benefits for you and your plan participants

We can help you build and execute a smarter, defined benefit (DB) destination strategy — one that helps you aspire to delivering the optimal outcomes to meet your objectives. Our DB solutions bring together actuarial, administration, and investment services for a seamless, end-to-end experience. Throughout the DB lifecycle, we can help by providing overarching operational capabilities as well. Need to de-risk? We can help with advice and solutions driven by an integrated, interdisciplinary team of specialists in areas such as manager research, pension strategy, investment operations, and more. Bottom line, our core and specialist teams work together to provide holistic advice and continual guidance.

$241 Billion
Global delegated assets under management.
$400 Billion
Liabilities under advisement in the U.S. — leading actuarial service provider.
1.8 Million+
Number of plan participants we touch in the U.S. with DB administrative outsourcing and co-sourcing

Why choose Mercer for Defined Benefit Plans?

 

  • Expertise: We have decades of experience as a thought leader and major innovator in actuarial consulting for defined benefit plans.
  • Comprehensive: By integrating administration, actuarial, investments, consulting and risk services, we’re able to provide end-to-end solutions to defined benefit clients.
  • Leadership: We are one of the largest global defined benefit wealth advisors. Why is that important? You can expect a continued investment in our intellectual capital and implementation capabilities.

   Please See Important Notices For Further Information.

     1  These case studies are illustrations of Mercer's capabilities provided to certain clients.  Client results will vary and there can be no guarantee of similar results.

     2 Information as of March 31, 2018

     3  Mercer estimate based on 2016 Form 5500 Schedule SB data for Corporate defined benefit plan filings.

     4 Information as of March 31, 2018

We’re here to help

We’d be happy to set up a free consultation or send you more information to get you started.

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