Vendor Analysis
published on Feb 18, 2022
Report Overview:
This NelsonHall vendor assessment analyzes Mercer’s offerings and capabilities in Benefits Administration Services.
Who is this Report for:
NelsonHall’s Benefits Administration profile on Mercer is a comprehensive assessment of Mercer offerings and capabilities, designed for:
- Sourcing managers monitoring the capabilities of existing suppliers of Benefits Administration Services and identifying vendor suitability for security services RFPs
- Vendor marketing, sales, and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the Benefits Administration Services sector.
Scope of this Report:
The report provides a comprehensive and objective analysis of Mercer’s Benefits Administration Service offerings and capabilities, and market and financial strengths, including:
- Identification of the company’s strategy, emphasis, and new developments
- Analysis of the company’s strengths, weaknesses, and outlook
- Revenue estimates
- Analysis of the profile of the company’s customer base including the company’s targeting strategy and examples of current contracts
- Analysis of the company’s offerings and key service components
- Analysis of the company’s delivery organization including the location of delivery locations.
Key Findings & Highlights:
This NelsonHall vendor assessment analyzes Mercer’s offerings and capabilities in Benefits Administration Services.
Mercer, headquartered in New York and a wholly-owned business of MMC, is a global leader in redefining the world of work, reshaping retirement and investment outcomes, and delivering health and well-being services. Mercer is one of the MMC businesses, the others being Marsh, Guy Carpenter, and Oliver Wyman. Mercer provides HR and financial advice and services. Mercer has 25k employees across 44 countries and is organized into three business segments: Health, Wealth, and Career. Its businesses are described below (with the NelsonHall estimate of approximate share of Mercer’s global 2021 revenues):
- Health (35%): includes benefit strategy and design, individual and voluntary benefits, benefit plan management and brokerage services, specialty health and benefits, benefits administration, and international consulting. Outside the United States, these services are provided under Mercer Marsh Benefits.
- Wealth (49%), consisting of:
- Retirement Consulting and administration (27%): includes defined benefit risk management, high-performing defined contribution plan, comprehensive plan management including actuarial services, administration, and plan design. Mercer offers mid-market DB pension administration services bundled with its consulting and brokerage services. Mercer has ~110 DB administration clients in the U.S. and 256 in Canada.
- Investments/Investment Management (20%): includes Outsourced Chief Investment Officer (OCIO) solutions (whereby Mercer takes on the fiduciary role of managing plan assets for a client), defined benefit and defined contribution risk management, and investment services, endowments, foundations, and wealth managers.
- Career (16%): includes leadership and organization performance, technology solutions, workforce analytics and planning, communication, rewards, executive compensation, mobility, and Workday deployment capability.
The Health and Wealth divisions comprise the majority of its benefits administration business. Mercer has offered benefits administration since 1937 and H&W administration since 1996 and one of the largest brokers in the U.S. with national relationships with most carriers and assigned executive sponsors to manage partner relationships.
Mercer’s US Health Benefits Administration has 331 clients with ~1.3 million employee lives. Mercer’s Wealth Administration has 134 clients with ~600k employee lives. Retiree health administration services been provided by Mercer for around 30 years. Outside the U.S., its health and benefits business services ~4k clients, and NelsonHall estimates Mercer has ~475 global benefits administration clients (excluding the US) with ~2m participants.
Mercer’s acquisitions and divesture activities over the last few years are shown below:
|
Date |
Type |
Description |
|---|---|---|
|
August 2019 |
Divestiture to Morneau Shepell of its large standalone market, health market, and DB pension plan administration business in the U.S. $57m. |
73 clients and ~1.9m participants impacted. |
|
April 2019 |
MMC’s Acquisition of Jardine Lloyd Thompson Group plc (JLT) |
Adding insurance, retirement, and benefits broker capabilities with 10k employees across 40 countries and strengthening its data and analytics offering. |
|
2016 |
Acquisition of Thomsons Online Benefits |
Adding global benefits technology and services, Darwin. |
|
2015 |
Divestiture to Transamerica of Mercer’s U.S. DC administration business |
~148 DC admin clients; ~917k DC plan participants, and ~71bn in assets under administration. |
|
2014 |
Acquisition of Transition Assist |
To expand its retiree exchange offering |
|
2010 |
Acquisition of Innovative Process Administration (IPA) |
Adds H&W capabilities for the mid-market. |
|
2004 |
Acquisition of Synhrgy HR Technologies |
Expands H&W capabilities in the U.S. |