2. There are multiple drivers underpinning the growth of Fiduciary
Management
DB Freeze
Defined Benefit
Loss of Key Staff
Defined Contribution
Increasing Regulation
Increasing investment
complexity
Delegate /
Outsource
Endowments & Foundations
Wealth Management B-B-C
Speed of Execution
Niche Asset Classes (eg.
alternatives)
Cost Control
There is approximately $250bn in delegated programs in the US today. By the
end of 2016, this number is expected to grow to $500bn
MERCER
February 27, 2014
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3. Fiduciary role and responsibilities
Traditional model versus Mercer’s Delegated Solutions
Advisory Model
Client
Potential with Mercer’s Delegated Solutions
Client
Mercer
Strategy Development
Define objectives
Strategic asset allocation1
Asset/liability analysis
Portfolio structuring1
Implementation
Manager selection
Manager transition
Draft investment guidelines1
Glide Path implementation
Funded status trigger execution
Ongoing Monitoring/Evaluation
Performance reporting
Cash flow management
Manager compliance
Proactive decisions
1
Information provided by Mercer, client makes decision and adopts policy
MERCER
February 27, 2014
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4. How do clients benefit from delegated solutions
YOUR BENEFITS
Improved Governance Structure
• Proactive, timely decision-making
• Quicker response and action, fewer missed opportunities
More Efficient Use of Resources
• Focus on high-impact, strategic decisions
• Delegate day-to-day, time consuming aspects of oversight role
Transfer Fiduciary Responsibility
• Team of experts accountable for results
• Full-time, real-time oversight of portfolio
Economies of Scale
• Access Mercer’s global buying power
• Our fee leverage sometimes pays our fee
Potentially Better Results
• Potential to improve the client’s risk / reward trade-off
• Potential to improve funding level / reduce volatility, improve member outcome, more
stable spending policy
MERCER
February 27, 2014
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