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Labor Department probing MMC benefits services

NEW YORK—Marsh & McLennan Cos. Inc. revealed Tuesday that it recently received a subpoena from the Department of Labor seeking documents pertaining to services provided by MMC subsidiaries to employee benefit plans, including documents relating to how such subsidiaries have been compensated for such services.

The subpoena, served Feb. 8, also seeks information concerning market service agreements–also known as contingent commission agreements–and the solicitation of bids from insurers in connection with such services, New York-based MMC said in its annual report filed with the U.S. Securities and Exchange Commission.

MMC recently settled New York Attorney General Eliot Spitzer’s suit alleging that the company’s brokerage unit rigged bids to steer business to those insurers paying it the highest contingent commissions (BI, Feb. 7).

MMC also said its Mercer Investment Consulting Inc. unit has received requests for information from the SEC in connection with an examination of the practices, compensation arrangements and disclosures of consultants that provide services to sponsors of pension plans or other market participants.

In addition, MMC, Putnam Investments and Mercer Inc. have been advised by the Boston office of the SEC that it is conducting an informal investigation of how companies within MMC refer business to one another and receive compensation for such referrals, the company said.

Mercer Investment Consulting also received a letter in February from the West Virginia Securities Commission seeking documents relating to services provided by Mercer Investment Consulting and related Mercer entities to the State of West Virginia and its public retirement system, MMC said.

Mercer also has received two requests for documents and testimony from the U.S. Department of Justice in connection with its industrywide investigation of potential anti-competitive agreements or understandings among providers of actuarial consulting services related to limitations of liability and other contractual terms or conditions of engagement.

The Pension Benefit Guaranty Corp. also is seeking information from MMC regarding the funded status of its retirement plan and certain financial and business developments at MMC since Mr. Spitzer’s civil lawsuit was filed against MMC last October, the company said.

MMC said that it is fully cooperating with all the investigations and examinations.

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