Mercer wins Singapore government mandate

Mercer Investment Consulting is said by well-placed market players in Singapore to have won a mandate issued by the Central Provident Fund to design a private pension scheme.

Mercer officials refused to comment.

Last autumn, the CPF invited consultants to bid to create concrete proposals to realize the idea of a low-cost private pension plan under the CPF investment scheme's framework. This follows from recommendations by a high-powered Economic Review Committee report that set out goals to boost Singapore's competitiveness as a centre for wealth management and investment services.

Following the ERC's recommendations, which the government accepted, several consultants said any plan would probably involve CPF seeking a single or few pension providers with extensive 401(k) experience in the US, or the international equivalent. Currently under the CPF investment scheme, members enjoy a lot of choice about how to invest CPF money, but multiple providers and distributors layers on high market costs. The trouble is that 401(k) providers in the US require a huge volume of business to justify their ultra-low fees, a scale hard to achieve in Singapore unless virtually all of the business goes to just one or two players.

Industry executives in the Lion City say Mercer's bid was a shoo-in. Watson Wyatt, its main competitor, declined to bid. Other firms are too small or lack the technical expertise. Moreover Mercer has advised the CPF in the past. "Moreover," says one observer, "Mercer has the skills in-house necessary to deliver."