UK - Mercer Human Resource Consulting's £8m contract with Profund Systems has been terminated by the firm's successor.
Jardine Lloyd Thompson acquired Profund’s principal assets after its venture capitalist owner, Kleinwort Capital, refused future funding and transferred them to a new firm, Profund Solutions.
But while JLT says it hopes most clients’ contracts will transfer to the new company, this offer does not extend to the Mercer deal which was signed last September.
Mercer operations manager Mike Tyler said: “We understand that our development work, despite our significant investment and continued commitment to working with Profund Systems, has not been transferred to the new firm.
“We remain in discussions with the involved parties to understand the implications of this. However, given these developments, we are reconsidering our position and all options available to us.”
Tyler said despite the negative impact on future development opportunities, Mercer’s current clients would be unaffected.
“Mercer operates and continues to invest in its own bespoke pensions administration systems in the UK, which are unaffected by the developments at Profund.”
Watson Wyatt head of administration consulting Allan Course (pictured) raised questions over the details of the contract.
“If JLT is going to be supporting Aon Consulting and Hewitt Bacon & Woodrow, why shouldn’t it support Mercer?”
“It has got to be down to the contract and financials – there must be something commercial that JLT does not like.”
Meanwhile, there was a mixed reaction to JLT’s move for Profund from other third-party administrators which use Profund.
Aon told PP it was considering bringing its pension fund administration software support in-house.
A spokeswoman said: “We are in discussions with Profund management in regards to any future relationship.
“We are also looking at the option of taking the support in-house because we already have around 50 support staff who work on the Profund software. We are reviewing our provisions and are confident we will do the best to service our clients.”
But Hewitt Bacon & Wood-row has opted to stay with Profund. It said: “Once appropriate confidentiality provisions are in place, we expect that Profund Solutions will shortly recommence support for us on a ‘business as usual’ basis.”
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