Introduction to Delegated Solutions

January 2014

MERCER 2April 13, 2023

There are multiple drivers underpinning the growth of Fiduciary Management

Defined Benefit

Defined Contribution

Endowments & Foundations

Niche Asset Classes (eg. alternatives)

There is approximately $250bn in delegated programs in the US today. By the end of 2016, this number is expected to grow to $500bn

DB Freeze

Loss of Key Staff

Increasing Regulation

Increasing investment complexity

Speed of Execution

Cost Control

Delegate / Outsource

Wealth Management B-B-C

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Fiduciary role and responsibilitiesTraditional model versus Mercer’s Delegated Solutions

Strategy Development

Define objectives

Strategic asset allocation1

Asset/liability analysis

Portfolio structuring1

Implementation

Manager selection

Manager transition

Draft investment guidelines1

Glide Path implementation

Funded status trigger execution

Ongoing Monitoring/Evaluation

Performance reporting

Cash flow management

Manager compliance

Proactive decisions

Advisory Model Potential with Mercer’s Delegated SolutionsClient Client Mercer

1 Information provided by Mercer, client makes decision and adopts policy

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How do clients benefit from delegated solutions

YOUR BENEFITS

Improved Governance Structure

• Proactive, timely decision-making

• Quicker response and action, fewer missed opportunities

More Efficient Use of Resources

• Focus on high-impact, strategic decisions

• Delegate day-to-day, time consuming aspects of oversight role

Transfer Fiduciary Responsibility

• Team of experts accountable for results

• Full-time, real-time oversight of portfolio

Economies of Scale

• Access Mercer’s global buying power

• Our fee leverage sometimes pays our fee

Potentially Better Results

• Potential to improve the client’s risk / reward trade-off

• Potential to improve funding level / reduce volatility, improve member outcome, more stable spending policy