UK – Mercer Human Resource Consulting has downplayed suggestions of a potential conflict of interest in its appointment to advise banking group HBOS on pensions matters.

The firm said today that it has been appointed as “corporate actuarial adviser” to Edinburgh-based HBOS, relating to six schemes worth a total £4.2bn (€6.2bn). The role is a new one at HBOS.

Existing actuarial appointments at each of the schemes remain unchanged.

In addition to the corporate appointment announced today, Mercer also advises the trustees at the £109m scheme of HBOS’s mortgage unit Birmingham Midshires. The other plans are advised by other firms, such as Watson Wyatt.

“HBOS has a number of defined benefit pension arrangements, the most significant of which continue to be advised by non-Mercer advisors. The Birmingham Midshires Scheme is small by comparison,” Mercer said in response to questions.

“As has already been agreed with HBOS, advice to the trustees of this scheme will be carried out by separate Mercer consultants in separate offices, with the necessary protocols (including Chinese walls) put in place to ensure that no conflict of interest arises.

HBOS spokesman Gareth Mackie said: “There are no conflicts of interest.”

Mercer’s appointment comes amid a debate about whether consulting firms should provide advice to both scheme sponsor and trustees.

In July rival firm Towers Perrin has set up a new service to focus solely on advice to corporates to avoid the potential conflicts arising from also advising trustees.

It said at the time that a greater assertiveness from trustees had led to some high-profile corporate deals being abandoned.

Rob Goward, European Partner at Mercer said today: “We are delighted to have been appointed to this key role and look forward to extending our valued relationship with HBOS.”

Mercer already advises HBOS on health care.

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