Well, Mercer got a nice little early lump of coal in their stocking, courtesy of The New York Times, which reported yesterday on the HR consultancy's big trouble in little old Alaska.
In 2007, Alaska's Retirement Management Board sued Mercer, claiming that the company,which was brought in as the state's actuarial consultant, made a boo-boo when it advised them on how much it needed to put aside for health care and pension benefits for a couple of the state's retirement funds. This is making news again because of a recent Alaska state court decision to deny Mercer's request that the suit be thrown out because their (now acknowledged) mistake didn't cause any "compensable harm." (Alaska is looking for $2.8B in damages.)
As is so often the case, the "whoopsie" here is not that Mercer screwed up. After all, if mistakes are outlawed, only outlaws will make mistakes, and that'll be no darned fun. No, it's what Mercer is alleged to have done after the fact is elevating this one from black-eye mistake to a problem that could put the company out of biz.
A Mercer actuary found the error before the 2002 valuations were to be presented to the Alaska plans and reported it, along with a colleague, to a supervisor. But after several discussions, the lawsuit says, the Mercer executives decided not to tell their client about the error.
...“Following standard Mercer policies designed to prevent clients from discovering Mercer’s errors,” Alaska’s lawyers contend, “Mercer’s actuaries carefully avoided creating a written record of their discussions and calculations, in order, one of them testified, to avoid creating a ‘trace.’ ”
If Alaska wins in court, the retirement system stands to get back a lot more than enough to make up for the mistake. They could get "punitive as well as treble damages."
Mercer has acknowledge that mistakes in judgment were made, but that this doesn't reflect on "the company’s corporate culture," which, if you look at their web site, is all (yawn) about being a "global leader in trusted HR and related financial advice"...working "with our clients as partners"...with those clients who "want strategic advice as well as flawless administration and execution of their HR programs."
Pre-resolution, there's already fallout that won't win Mercer any popularity contest with their competitors:
... while the suit is pending, actuarial firms are finding it impossible to buy liability insurance against such claims.
So much for Mercer's web site chirpery:
In our work with clients, we make a positive impact on the world every day.
(Be very, very careful of what you put on your web site.)
When will supposedly smart companies/pols/superstars learn that it's seldom the core offense that trips them up, it's the lying, scheming, cover-ups. Were Watergate and Lewinskygate all for naught?
Apparently so.
I can sort of understand junior employees being so scared that they'd cover up a mistake. Dumb behavior, assuredly. Frankly, the best thing to do when you f-up is throw it on your manager's plate. But when the cover-ups start making their way up the corporate hierarchy, well...
Don't these maroons read The Wall Street Journal , The New York Times, or The National Enquirer?
Lying may be fun. Lying may be easy. Lying may save you a bit of temporary embarrassment and discomfort.
But generally it jumps back up and bites you. Hard.
Or am I missing something?
Do people continue to do it because, in most cases, the lie is never found out?
Now, there's a thought...
Meanwhile, mercy, mercy, me. Things for Mercer ain't going to be what they used to be for a while, if ever.
Would you put your trust in this organization?
Come on. They're HR experts. Wouldn't you think they'd know better than, say, rapacious hedge fund gougers?
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Then there's the hideous possibility that, if the great state of Alaska prevails, our girl Sarah will use this to foment more us vs. them outrage. Think that'll happen? You betcha!
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