Watson Wyatt to spin off North America multi-employer retirement business

    Smooth Transition of Services Expected to New Companies Headed by Former
    WW Associates

    WASHINGTON, Oct. 18 /CNW/ - Watson Wyatt Worldwide, a leading global
consulting firm, announced today that it will spin off its North America
multi-employer retirement business to two new companies. The specific plans
affected are Taft Hartley plans in the United States and private sector,
negotiated costs, trusteed plans in Canada.
    The companies, Horizon Actuarial Services in the U.S. and PBI Actuarial
Consultants in Canada, will be owned and operated by current Watson Wyatt
associates. These associates, who focus on multi-employer retirement plans,
will move to the new companies over the next several months. Watson Wyatt will
have no ownership stake in either company, but will receive a percentage of
the new companies' revenues for the next five years.
    "Multi-employer retirement work is a specialized area, better handled by
a group of professionals dedicated specifically to that market," said Gene
Wickes, global director of benefits consulting at Watson Wyatt. "Similar to
our spin-off of public pension fund retirement work earlier this decade, this
transition makes good strategic sense. It is consistent with Watson Wyatt's
focus on a core target market of the world's leading companies and should also
lower our risk profile in the long term."
    "We are excited to continue to provide high-quality, comprehensive
retirement and actuarial services that multi-employer clients have come to
expect," said Stan Goldfarb, one of the principals of Horizon Actuarial
Services. "The new companies provide us a valuable opportunity to expand this
business while sharpening our focus on the issues most important to our
multi-employer clients."
    The transition will affect approximately 70 multi-employer retirement
clients, accounting for approximately $15 million in annual revenue. The
transition is expected to be completed by January 31, 2008, and will result in
a $0.03 to $0.05 reduction in the Company's fully diluted earnings per share
in fiscal 2008. Additionally, the Company may incur up to $1.0 million in
one-time restructuring charges related to this transaction, all in fiscal

    About Watson Wyatt Worldwide

    Watson Wyatt (NYSE:   WW) is the trusted business partner to the world's
leading organizations on people and financial issues. The firm's global
services include: managing the cost and effectiveness of employee benefit
programs; developing attraction, retention and reward strategies; advising
pension plan sponsors and other institutions on optimal investment strategies;
providing strategic and financial advice to insurance and financial services
companies; and delivering related technology, outsourcing and data services.
Watson Wyatt has 7,000 associates in 31 countries and is located on the Web at

    Forward-Looking Statements

    Statements in this press release regarding projections and expectations
of future earnings, revenues, operations, business trends and other such items
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are based on
management's beliefs, as well as assumptions made by, and information
currently available to management. Because such statements are based on
expectations and are not statements of fact, actual events and results may
differ materially from those projected. A number of risks and uncertainties
exist which could cause actual results to differ materially from the results
reflected in these forward-looking statements. Such factors include but are
not limited to the successful spin-off of the multi-employer retirement
business; the company's ability to integrate the operations of acquired
businesses into our own business, processes and systems, and achieve the
anticipated results; our continued ability to recruit and retain qualified
associates; the success of our marketing, client development and sales
programs; our ability to maintain client relationships and to attract new
clients; declines in demand for our services; outcomes of pending or future
litigation and the availability and capacity of professional liability
insurance to fund pending or future judgments or settlements; the ability of
the company to obtain professional liability insurance; a significant decrease
in the demand for the consulting, actuarial and other services we offer as a
result of changing economic conditions or other factors; actions by
competitors offering human resources consulting services, including public
accounting and consulting firms, technology consulting firms and
internet/intranet development firms; our continued ability to achieve cost
reductions; foreign currency exchange and interest rate fluctuations; exposure
to liabilities of acquired businesses that have not been expressly assumed;
general economic and business conditions that adversely affect us or our
clients; the level of capital resources required for future acquisitions and
business opportunities; regulatory developments abroad and domestically that
impact our business practices; legislative and technological developments that
may affect the demand for or costs of our services; and other factors
discussed under "Risk Factors" in the company's Annual Report on Form 10-K for
the year ended June 30, 2007 and filed on August 24, 2007, with the Securities
and Exchange Commission. These statements are based on assumptions that may
not come true. All forward-looking disclosure is speculative by its nature.
The company undertakes no obligation to update any of the forward-looking
information included in this report, whether as a result of new information,
future events, changed expectations or otherwise.

For further information:

For further information: Ed Emerman, (609) 452-5967,
eemrman@eaglepr.com; Gal Wilder, (416) 924-5700, gal.wilder@cohnwolfe.ca

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