When will they Learn?

As Gretchen Morgenson writes in yesterday’s NY Times (12/20/09), “To err is human. To cover up, plain dumb.”  

She reports that Mercer is now being sued for $2.8 billion because it allegedly made errors as Alaska’s actuarial consultant in estimating the amounts needed to be set aside by two of the state’s retirement plans for certain benefits in 2002.  

Mercer, so the story goes, apparently discovered the errors before they were presented to the Alaska plans, but “after several discussions, the lawsuit says, the Mercer executives decided not to tell their client about the error.  

One of the Mercer actuaries on the account testified …that Mercer did not disclose the error because the firm was “fearful of being fired.”  The error was compounded year after year because “it would have been difficult to explain.”  

What happened to tone at the top?  What is the board doing about it?  What did the board do about it?  

JM, 12/21/09

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