State Attorneys this afternoon (Wednesday) will explain in court their eleven Billion dollar lawsuit against the company giving actuarial advice when the state’s shortfall in pension funding arose.
At their most recent audit, the Public Employee Retirement System and the Teacher’s Retirement System showed a combined actuarial shortfall of seven and a half Billion dollars. The state claims that Mercer, Inc., was guilty of malpractice, breach of contract, fraud and misrepresentation while it was under contract to calculate the amount of money that employers should contribute to their workers’ retirement plans.
Mercer says the state is incorrectly blaming the company for investment losses, increases in health care costs, and decisions made by the retirement board that counteracted its advice. The company says its advice is only an estimate – not the results of an exact science. It also points to the legislature that did not follow their advice.
The state is asking for two-point-eight Billion dollars in actual damages it links to Mercer, triple that amount for damages and unspecified punitive damages from the company.
This first hearing is on Mercer’s motion to dismiss the suit.