Watson quits UK local authority actuarial market
UK – Consultancy firm Watson Wyatt is withdrawing from a one million pound (1.45 million euro) business providing actuarial consulting to UK local authorities.
“Watson Wyatt has decided to withdraw from providing actuarial services to local authority pension funds,” the company said in a statement. It currently has 21 local authority pension fund clients.
Spokesman Bruce Wraight said the business represents around one percent, or one million pounds, of its annual turnover.
“We want to focus our research and development capabilities elsewhere,” he said, adding that the market for providing actuarial services to local authorities is a specialised one.
No jobs would go as a result of the move, Wraight said. “Some are disappointed,” he said when asked about client reaction. One of the firm’s clients, Essex County Council, said it was already in the process of reviewing its actuarial arrangements.
Watson’s consulting rival firm Hewitt Bacon & Woodrow was surprised by the decision. Tim Lunn, actuarial consultant with Hewitt Bacon & Woodrow said: "Hewitt Bacon & Woodrow has a very positive outlook towards local authorities and the wider public sector.” He added that the firm has made a “significant investment” to meet the needs of the sector.
“Indeed,” Lunn said, “We believe we are well-positioned and we are very happy to take on new public sector work."
Watson will continue to provide investment-consulting services to local authority pension funds, including asset liability modelling studies. It will also continue to provide other consulting services to local authorities.
"Our involvement with local authority pension funds has been declining in recent years and, when coupled with the growth of our firm, this now represents a small part of our business," said Hugh Chambers, a partner at Watson Wyatt.
The clients are being told of the decision this week – Watson expects to have ended all actuarial engagements with them by the end of October.