liveupdate needs to be installed on SEPM.

for the error can you check this article and let know if it fixes the issue

http://www.symantec.com/business/support/index?page=content&id=TECH103112

Yes, liveupdate can be reinstalled on SEPM 12.1.

Remove it through add/remove programs, reinstall it & don't forget to re-register it

After reinstall go through the following steps to re-register it.

1. Open a command window, then browse to:
   C:\Program Files\Symantec\Symantec Endpoint Protection Manager\bin
2. Type lucatalog -cleanup and press Enter.
3. Type lucatalog -forcedupdate and press Enter.
4. Run LiveUpdate to verify that there are no errors.

If the error persists, examine Log.LiveUpdate for more detailed information or error codes.

1. Remove older liveupdate component 
2. Delete the traces as well

On a 32-bit OS:

                      C:\Program Files\Symantec\LiveUpdate- Delete this whole folder

                      C:\Documents and Settings\All Users\Application Data\Symantec\LiveUpdate

                                   Delete the files: Product.Inventory.LiveUpdate and Settings.LiveUpdate

             On a 64-bit OS:

                     C:\ProgramData\Symantec\LiveUpdate – Delete this whole folder

                     C:\Users\All Users\Symantec\LiveUpdate

                     C:\ProgramData\Symantec\LiveUpdate

                                  Delete the files: Product.Inventory.LiveUpdate and Settings.LiveUpdate (ALL of them).

• Follow this article to download the Latest version fo live update component.

Windows LiveUpdate Client for Use with Symantec Endpoint Protection Manager 12.1

http://www.symantec.com/docs/TECH181305

LUSETUP_3_3_2_2.EXE

• Install the latest version of Liveupdate component

 At the command prompt type cd and the path to lucatalog.exe:
                     cd C:\Program Files\Symantec\Symantec Endpoint Protection Manager\bin       (Enterprise Edition)
                     cd C:\Program Files (x86)\Symantec\Symantec Endpoint Protection Manager\bin       (Enterprise Edition 64-bit)
                     cd C:\Program Files\Symantec\Symantec Protection Center\bin                 (Small Business Edition)
                     cd C:\Program Files (x86)\Symantec\Symantec Protection Center\bin                 (Small Business Edition 64-bit)
  Type lucatalog.exe -cleanup  When the command line path returns, cleanup is done.
. Type lucatalog.exe -forcedupdate

• Run LUALL from run command window

• It will succeed 

Error: LiveUpdate encountered one or more errors. Return code = 4" in LiveUpdate status in Symantec Endpoint Protection Manager

http://www.symantec.com/business/support/index?page=content&id=TECH103112

Check this similer thread

https://www-secure.symantec.com/connect/forums/sepm-v-121-ru1-liveupdate-return-error-code-4-live-updating

Hello,

Please make sure the System time is correct.

I would then suggest you to follow these Articles below:

How to Uninstall and Reinstall LiveUpdate on SEPM 12.1 (Enterprise Edition or Small Business Edition)

http://www.symantec.com/docs/TECH171060

Windows LiveUpdate Client for Use with Symantec Endpoint Protection Manager 12.1

http://www.symantec.com/docs/TECH181305

and in case, you are using the proxy on the environment, please work on the steps provided in the Article below:

How to Configure the Proxy settings in the Symantec Endpoint Protection Manager (SEPM) 12.1

https://www-secure.symantec.com/connect/articles/how-configure-proxy-settings-symantec-endpoint-protection-manager-sepm-121

http://www.symantec.com/docs/TECH180166

Hope that helps!!

Please provide your environment deatils. as you mentioned you got 3 SEPM. is that configured for replication or load balancing.

how many SEPM you facing the issue.

Do the suggested stepst on those you facing issues with....