The healthcare company Mercer has been sued to the tune of $1.8 bn by Alaska in damages they had created with the miscalculation of liabilities of the schemes of their two pension funds.
In this era of booming healthcare costs, Mercer being the actuary for Alaska’s $11.4 bn Public Employees’ Retirement System and $5.2 bn Teacher’s Retirement System, were sued for their mistaken actuarial assumptions and methods of future health cores. The mistakes are attributed to basic mathematical and technical errors on the part of Mercer.
Mercer was in charge of advising Alaska on how to keep its retirement plans financially sound. However when they started calculating expected healthcare costs for the future, Mercer did not meet these standards and this played an important part in the current unfunded liability of their plans.