EUROPE - Mercer is pooling its accounting, funding and investment expertise in a European Financial Strategy Group (FSG) to advise corporate clients on pension fund risks.

By year end, the consultant wants to increase the current team of 75 people in the group to around 100 by "aggressive recruitment".

Operations of the European FSG have already been set up in the UK, the Netherlands, Ireland and Switzerland with Germany to follow in two weeks time.

Mercer's David Fogarty explained to IPE those particular countries were chosen out of the large number of Mercer's European operations because defined benefit (DB) plans are prevalent in those countries.

"We see a big gap between the kind of typical FRS17 funding level and a buyout level," he said.

"We want to advise on the various things a company can do to manage pension risk without going all the way to a buyout both in terms of their investment strategy as well as in terms of their benefits, such as a selective buyout."

The service, which has been set up because demand by corporate clients on managing pension scheme risks has increased, might also be offered in other countries depending on demand.

"France is a good example," Fogarty explained.

"It does not particularly have any DB liabilities. But French multinationals own a lot of businesses in countries where there are DB liabilities. Depending on the desire of French corporates, we would either provide advise from a different European city or we might do it from Paris."

He said Mercer wants to help companies establish where they are regarding their pension risk management and where they would like to get to as well as find a solution.