Mercer LLC will pay the Alaska Retirement Management Board $500 million to settle a lawsuit accusing the firm of negligence that contributed to the multi-billion unfunded liabilities of the state’s employee pension funds.

The state in 2007 sued the former actuary for its primary state pension funds, alleging professional malpractice, breach of contract and unfair trade practices. Mercer is a wholly owned subsidiary of Marsh & McLennan Cos.

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