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Mercer’s bundled retirement plan solution Mercer Wise 401(k) passes USD1bn in AUM

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Mercer’s retirement plan solution, Mercer Wise 401(k), has exceeded USD1 billion in assets under management.

Launched in 2017, Mercer Wise 401(k) is a bundled solution seeking to improve participant outcomes while reducing plan sponsors’ administrative burdens and fiduciary risk. This fully outsourced 401(k) solution enables Mercer to take responsibility for investment decisions within each plan as well as serving as named fiduciary under ERISA. Mercer also assumes responsibility for both administrative and operating functions on behalf of plan sponsors, which may often reduce costs for plan sponsors and lower fees and improve outcomes for participants.

Mercer Wise 401(k)’s latest AUM milestone comes at a time when regulatory reforms are expected to further increase plan sponsors’ access to bundled plans, as evident in the passage of the 2019 SECURE Act and the establishment of Pooled Employer Plans. However, these plans are only expected to be available starting in 2021, and are not expected to initially offer the scale, expertise and track record of Mercer’s bundled plan solution.

In addition to regulatory reform, the Covid-19 crisis is causing plan sponsors to consider even more ways to efficiently and effectively manage their retirement programs while remaining focused on improving participant outcomes. Two recent Mercer polls show that nearly 50 per cent of respondents say they are spending less time than they would like to on their retirement plans, an issue which is being exacerbated due to the Covid-19 crisis.

Chris Mahoney, Senior Partner and Leader for Mercer’s US Wealth business, says: “Exceeding USD1 billion in AUM is another milestone for Mercer Wise 401(k) and demonstrates Mercer’s longstanding scale and experience in managing bundled plans, providing us with the ability to assist prospective clients at a time when scale and expertise are vital and many organisations are just entering this market. While more bundled plan options are expected to come to market next year, organisations do not need to wait until then to obtain the benefits of bundled plans, as these solutions are available now and can be customised and implemented today with the right provider.”

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