By Rhandell Rubio

Mercer Japan and ORIX Corporation have agreed to a collaboration agreement to provide comprehensive plan design, valuation, and administrative services for Japanese corporate pension plans. Mercer is one of the leading providers of consulting, outsourcing and investment services, while ORIX is an integrated financial services group catering to both corporate and retail customers.

Under the agreement, Mercer will provide actuarial services including annual funding status reviews and funding revaluations for defined benefit corporate pension plans. ORIX, meanwhile, will provide administrative services such as record keeping and contribution and benefit payment services.

The cooperation comes at a time when legal requirements are changing for defined benefit corporate pension plans in Japan, with the Tax Qualified Pension Plan (TQPP) will be abolished in March 2012. This shift will affect pension plans sponsored by 25,441 firms in Japan with around 348 million participants. While the firms have the option of continuing a TQPP plan, they will also have new options: terminating such plans and transitioning to a defined contribution pension plan, a defined benefit pension plan or a Smaller Enterprise Retirement Allowance Mutual Aid plan. If a firm decides to abolish its current plan and adopt a newly permitted alternative, Mercer and ORIX say they are prepared to support the transition needs as a comprehensive advisor and administrator.

In Japan, Mercer explains that it is the first firm headquartered outside the country to provide comprehensive services on pension plan management, including plan design and accounting valuation. In addition, the agreement allows ORIX to expand its corporate pension business to non-Japanese multinationals operating in Japan, many of which are Mercer clients. Together, both firms will offer an integrated service model that has many advantages compared with dealing with multiple providers.