© Copyright 2006 Rogers Publishing Ltd. The following article first appeared in the June 2005 edition of BENEFITS CANADA magazine.
Mercer Global Investments comes to Canada.

What started out as an extension of its investment consulting business in Australia is turning into a global launch in a whole new market. Mercer Global Investments is methodically rolling out investment funds—starting with the United States—and intends to eventually make its way into Canada, says Barry McInerney, president of Mercer Global Investments in New York.

“The one area that we want to have to fill out our outsourcing itinerary would be to have an investment engine,” notes McInerney. Ultimately, he adds, Mercer wanted to be able to give clients the choice of a consulting solution or an outsourcing solution, which in this case includes an investment management arm. He says the rollout will occur in Europe and Asia by year-end and the foray into Canada will likely be in the same time frame or possibly early next year. Plan sponsors in all regions will have the ability to create a bundled service through Mercer or will be able to pick and choose the types of products they need for their particular plan.

Currently, Mercer is open for business in the U.S. on the investment side for the defined benefit(DB)and endowment market, notes McInerney. “We obviously want to provide our investment funds to all markets and we’re going to start with institutional in all countries, and that means DB and defined contribution (DC).”

So far, says McInerney, Mercer Global Investments has about US$6 billion under management, with the bulk of that being in Australia. Several hundred million of that, he adds, is in the U.S. “We expect that to grow nicely,” he says.

In Canada, he adds, Mercer will likely roll out its funds in order to gain a part of the DC market but will have to piggyback onto other distribution and administrative channels. He says “a good array of funds” will be launched and will grow over time. But in the meantime, a lot of those decisions are still under review.

Despite the elimination of the Foreign Property Rule, Mercer plans on balancing foreign and domestic offerings. “Given the global platform and research, it will be even more compelling when we are able to provide that reach for our Canadian clients. But, we still want ensure that we have very strong domestic products.”

As far as markets go, McInerney says the “sweet spot” will likely be in the smaller or mid-size plan market, even though some of the larger plans still look for outsourcing as well.


A new study by U.S. researchers finds that AstraZeneca’s cholesterol drug Crestor had double the side effects of its competitors. AstraZeneca strongly refutes this claim.

The review led by Richard Karas, director of the preventive cardiology at Tufts-New England Medical Center in Boston, showed a rate of 28 adverse events per million patients prescribed Crestor. In fact, that is 2.2 times more adverse events seen with Merck and Co.’s Zocor and 6.8 times more than Pfizer Inc.’s Lipitor.

The governor of the Greek central bank has warned the country is set to pay 25% of its gross domestic product(GDP)in pensions by 2050. Nicholas Garganas said this is due to the low retirement age, high unemployment and falling birth rates.

The governor pointed out that Greeks work on average until they are 59.5 years old. Also, according to the Bank of Greece, pensions will cost an extra 10% of GDP by 2050—increasing the total social security bill to a quarter of the country’s GDP. Greece’s unemployment rate is estimated at about 10%.

United Airlines has won permission from U.S. Federal Bankruptcy Court to terminate its four defined benefit plans which hold about US$3.2 billion in obligation over the next five years.

In Chicago, Judge Eugene Wedoff said the agreement does not violate federal law and the employees could have ended up in worse shape had the airline ceased operations altogether. The Washington-based Pension Benefit Guaranty Corporation will assume responsibility for the plans, which cover about 134,000 people.

Joel Kranc

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