Lockheed Martin pension scheme opts for fiduciary management from Aon Hewitt (20 July 2015)
Aon Survey: Employers Split on the Impact that Carrier Consolidation Will Have on Their Health Strategies (15 July 2015)
Aon Applauds Clients Named as Best Employers for Healthy Lifestyles by National Business Group on Health (14 July 2015)
Aon Hewitt appointed by the Trustees of the Asda Group Pension Scheme for actuarial advice (13 July 2015)
Aon Declares Quarterly Dividend (10 July 2015)
Aon Hewitt says EFRBS consultation will mean employers have to think (10 July 2015)
Peers Most Likely to Influence Employers' Health Strategies; 2016 Election a Non-Factor (9 July 2015)
Aon Hewitt says government consultation raises key questions for the pensions industry (9 July 2015)
Aon Announces Second Quarter 2015 Earnings Release and Conference Call (7 July 2015)
U.S. Pension Funded Status Deficit Drops $81 Billion in 2nd Quarter of 2015 (7 July 2015)
Aon Hewitt says boosting longer-term economic growth should be the priority of Summer Budget (2 July 2015)
LONDON, July 20, 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has been appointed to provide delegated investment services to the Lockheed Martin UK Pension Plan.
Aon Hewitt will provide full fiduciary management services to the defence industry company’s £230 million defined benefit pension plan.
Chris Warren, chair of the trustees of the Lockheed Martin Pension Plan, said:
“After speaking with a number of fiduciary providers we felt that Aon Hewitt offered us a complete solution that directly addressed our needs while also improving the governance of the scheme. Getting better control and management of the scheme’s key risks through greater diversification and use of liability driven investment, was one of the main reasons we chose Aon Hewitt. The strong relationship we have built up during this process has given us real confidence in their ability to deliver the service we need.”
Tim Currell, partner at Aon Hewitt said:
“We have worked closely with The Lockheed Martin UK Pension Plan for the past 18 months and have built an incredibly strong relationship. We are very excited about this fiduciary appointment and to have the opportunity to design a solution that directly meets their needs.”
Sion Cole, partner & head of Client Solutions in Aon Hewitt’s fiduciary business, Delegated Consulting Services, said:
“The UK fiduciary market continues to grow strongly and this latest win reaffirms our position as one of the leading providers of fiduciary management services. We believe our ability to listen to pension schemes and to offer them truly tailored fiduciary solutions that meet their unique needs is what sets us apart. Indeed, this approach is one of the main reasons cited by our clients for appointing us as their provider.”
LINCOLNSHIRE, Ill., July 15, 2015 /PRNewswire/ -- In the wake of the proposed Aetna and Humana merger, a new pulse survey from Aon (NYSE: AON) reveals that companies have varying opinions on the impact that existing and future health insurer consolidation will have on their organization's health and benefits strategy.
On July 8, Aon conducted a brief pulse survey of approximately 100 companies to gauge their initial reactions to current and future carrier consolidation. Twenty-one percent said carrier consolidation will provide greater cost efficiencies that will be reflected in better cost management. Forty-six percent, however, believe it will result in fewer health plan options for them and their employees. One-third said it will not greatly impact their organization or employees.
Despite these differences of opinion, 44 percent of companies do not expect to make any meaningful changes to their overall health strategies. The remaining 54 percent said they are considering a few options. These include:
- Reassessing their current vendor within the next two years (38 percent)
- Adopting third-party vendor solutions, such as telemedicine or transparency to supplement what the health plan provides (13 percent)
- Supplementing national carriers with regional/local players (5 percent)
Companies share a similar sentiment on their future retiree health strategies. More than three-quarters (76 percent) said that consolidation will not impact their decision-making in the short term. Fourteen percent said the potential market disruption will encourage them to take a "wait and see" approach regarding custom group or exchange-based strategies, and just 10 percent said it will provide an opportunity to make changes and leverage the potential for new market efficiencies.
"Despite whether employers think merger consolidation is good or bad for the industry, most do not feel the need to wait to see how the market shakes out before moving forward with the analysis and implementation of their longer-term health care strategies," said Tucker Sharp, global chief broking officer of Aon Health. "Employers know they need to take action now to address the impact of inevitable."
LINCOLNSHIRE, July 14, 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), today congratulated its valued health clients that were recently named as Best Employers for Healthy Lifestyles® by the National Business Group on Health, including Aramark, Cardinal Health, CVS Health, IBM Corporation, Johnson & Johnson, JP Morgan Chase, NextEra Energy and Walgreens Boots Alliance, among others.
The Best Employers for Healthy Lifestyles® awards recognize organizations with a continuous commitment to resources, innovation and plan design, supporting programs dedicated to improving employee health and well-being. Winners are selected by a panel of peer judges from Business Group member companies.
“Health is a foundational element of wellness, and it can drive financial results in terms of productivity, quality and risk control,” said Stephanie Pronk, senior vice president at Aon Hewitt. “Leading organizations that foster a strong culture of health, through leading by example and encouraging healthy activities, will cultivate a workforce that is happier, demonstrates better health behaviors and is more actively engaged.”
Nearly two-thirds of the 64 organizations named as a Best Employers for Healthy Lifestyles® have worked with Aon to design, implement and/or communicate comprehensive health and wellness strategies to employees, retirees and their families.
“At NextEra Energy, we’re strong advocates for providing our employees and their families a wide range of opportunities to help them make good choices about their health and well-being,” said Deborah Caplan, executive vice president, human resources and corporate services for NextEra Energy. “We’re all about creating a culture that allows employees to be fully engaged and achieve a healthy and high-performing work life that meets the business needs of our company and their own personal and family needs at the same time.”
Aon Hewitt has been a partner of the National Business Group on Health to promote employer investment in health and well-being programs. Aon Hewitt representatives sit on the boards for both the National Business Group on Health Institute on Innovation in Workforce Wellbeing and the Institute on Health, Productivity and Human Capital.
LONDON, July 13, 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has been appointed as the actuarial adviser to the Trustees of the Asda Group Pension Scheme.
Asda, which is part of Walmart, the US-based world’s largest retailer, has a defined benefit scheme with 13,500 members. The trustees of the scheme have appointed Aon Hewitt to be the scheme actuary. Aon also provides advice on private medical insurance and group life cover to Asda.
Philip Dennis, partner at Aon Hewitt, said: “It is very gratifying to be asked by the trustees of the Asda scheme to become their scheme actuary. Aon has had a global relationship with Asda’s parent company, Walmart, for some time, but this independent appointment is especially pleasing.
“We are looking forward to getting to know all aspects of the scheme and bringing our market-leading thinking and advice to the trustees, in order to assist them in meeting their goals for the scheme.”
LONDON, July 10, 2015 – Aon plc (NYSE:AON), the leading global provider of risk management and human resource consulting and outsourcing, announced today that the Board of Directors has declared a quarterly cash dividend of $0.30 per share on outstanding Class A Ordinary Shares. The dividend is payable August 17, 2015 to shareholders of record on August 3, 2015.
Challenge to keep higher earners in pensions increases
LONDON, July 10, 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has said that changes in allowances and a consultation on unfunded employer financed retirement benefit schemes (EFRBS) will offer a new challenge to employers trying to keep higher earning individuals engaged in pension saving.
There was an expectation that further changes to allowances might lead to an increase in employers considering unregistered pension schemes as a means of providing more tax efficient benefits for these individuals. However, the government has fired a warning shot that will leave employers wary of setting them up before further clarity is given. Liam Mayne, principal consultant at Aon Hewitt, said: “The government put a shot across the bows of any employers considering the idea of providing retirement benefits through an EFRBS with the announcement that it will consult on tackling the use of unfunded EFRBS to obtain a tax advantage in relation to remuneration. This follows on from the clamp down on the use of funded EFRBS in 2011 by the previous government and their clearly stated intention that they would monitor the use of other forms of EFRBS in the future.
“EFRBS have been an alternative and tax-efficient way of providing final salary, and in some cases defined contribution, benefits to those affected by the lifetime and annual allowances, but employers will now have to think twice before using them. The question now is what other alternatives can they use? Many employers will be resigned to providing little significant pension benefits for higher earning individuals and offering additional cash instead – potentially via a tax efficient wrapper like a corporate ISA as a way to re-engage employees in their wider savings.
Liam Mayne continued:
“Employers may simply have to be more creative in the way they help individuals through this ever more complex area. It is our view that many will ease access to online tools, offer subsidised IFA costs, or give more and clearer information in annual benefits statements to allow regular monitoring against the allowances.”
Aon Survey Shows Little Action Planned for 2015
LINCOLNSHIRE, Ill., July 9, 2015 /PRNewswire/ -- Most employers plan to change their long-term health strategies to evolve with the changing health landscape, yet a new Aon Hewitt survey shows there has been little effort over the past year to move in that direction. So what is most likely to drive the impetus for change?
According to Aon Hewitt's survey of more than 1,000 companies, one of the biggest drivers is what other employers do. More than three-quarters of companies (77 percent) said the actions of their peers have a significant or moderate influence on their own health care strategies, and 59 percent said so do the actions of major employers in their key geographies.
Surprisingly, 46 percent said the upcoming 2016 Presidential and Congressional Election will have little to no impact on their health strategy. About half (49 percent) said it will have some impact, but they plan to move forward and will develop some alternatives tied to different election scenarios.
"Cost increases have eased over the past few years, reducing the pressure on companies to deviate from the status quo," said Sue Willette, senior vice president for Health at Aon and the leader of the survey. "Very few companies want to be first in making transformative changes, but many want to be fast followers. The rate at which companies will take action is likely to be determined by a combination of the predicted spike in future cost trend and bold moves from other employers, particularly from those companies in related industries."
Employers Taking Little to No Action in 2015
According to Aon Hewitt's survey, very few employers are planning to make changes to their health strategies in 2015. Even some of the most prevalent tactics in employers' health strategies had significantly low adoption rates in 2015:
- Increasing deductibles and copays (16 percent)
- Providing cost and quality transparency tools (10 percent)
- Providing personalized, aggregated online views of health care usage and other information (9 percent)
|Activities in Companies' Health Care Strategies
|Increase deductibles and/or copays
|Provide cost and quality transparency tools
|Provide personalized, aggregated online view of health care usage and other information
| Increase number of plan options available, coupled with decision support tools, to help employees find a plan that best meets their needs
|Reduce subsidies for covered dependents across the board
|Implement/increase specific surcharges for adult dependents who have coverage elsewhere
|Offer CDHP as a full replacement
|Provide expanded choice of plan design options for completing certain health activities
|Provide on-site preventive, primary and urgent care services
|Eliminate coverage for adult dependents with access to other coverage
Continued Focus on Health and Wellness Programs
Despite little change in health care strategies for 2015, 87 percent of employers indicated that increasing participant awareness of and decision making related to health issues is their top priority. However, employer action is still slow. Aon Hewitt's survey showed a small but continued increase in the number of employers offering various health and wellness-related programs. Almost two-thirds of companies offered biometric screenings and smoking cessation programs in 2015, and about a third offer stress reduction and nutrition programs.
|Health Programs Offered
|Physical activity challenges
|Health improvement coaching
|On site fitness center
"Focusing on health and wellness is a key initiative for employers, and most are focusing on a few behaviors over the long-term to maximize the impact improving health has on business performance," said Stephanie Pronk, senior vice president and National Health Transformation Leader. "Companies that promote a strong culture of health have employees who are happier, less stressed and more engaged, which leads to better productivity and stronger business performance."
LONDON, July 9, 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has commented on the Government’s new Green Paper, ‘Strengthening the incentive to save; a consultation on pensions tax relief”, announced in the Summer Budget.Aon Hewitt says government consultation raises key questions for the pensions industry
Kevin Wesbroom, senior partner at Aon Hewitt, said:
“This would appear to be a genuine consultation on whether the pension tax system needs to change, rather than how the system should be changed. But we cannot ignore the influence of the fiscal imperative to get a suitable outcome in terms of tax revenue.
“There is a big link made between tax incentives and personal responsibility – but this fails to recognise the centrality of the role of the employer in retirement savings – and their role needs to remain central if we are to see realistic levels of retirement savings in the future.”
Kevin Wesbroom continued: “The principles guiding reform are sound – simplicity, transparency, personal responsibility and sustainability are difficult to argue with. But, as ever, the real issues are less obvious. These principles could have been applied to the last major changes, those of Pension A-Day in 2006. But it didn't take long for Pension Simplification to become Complexification, as successive measures were added, reliefs restricted or removed and the administrative burden escalated out of control.”
Engaging in pension saving
Kevin Wesbroom said: “One of the consultation questions is whether greater engagement in pensions savings can be increased by a simpler system. We would support making the tax relief more explicit and simpler to understand for individuals; a variation of Buy One, Get One Free - where the tax relief is converted to an explicit addition to the pension pot - has a high intuitive appeal. But the price to be paid is a switch to ISA-style taxation – which gives the tax relief up and then makes the pension exempt. “This switches the tax timing for a generation, and would have huge appeal to the Treasury. Individuals may have less confidence in trusting future governments to honour promises on maintaining the tax free nature of pension pay-outs.”
The role of the employer
Kevin Wesbroom said: “Where do employers stand in all of this? Many provide pensions because they have to – which is the success of auto-enrolment (AE). We would support the introduction of greater flexibility here – such as the option of individuals being able to meet the AE regulations by saving into an ISA, not a pension. But many employers provide pensions because they want to support their workforce – the classic mantra of recruit, retain and retire. These employers may find the concept of broader savings more appealing - they still need their workforce to retire in an orderly fashion. Pensions have a continuing, central role to play here.”
Better planning for retirement
Kevin Wesbroom said: “The consultation asks if an alternative system would allow individuals to plan better for their retirement. The classic response from pensions professionals is that this requires a stable pension system. But years of experience have forced us to confront the futility of this ambition. Pensions savings is a large part of the nations' capital and a big source of taxation attention. Few countries around the world have resisted the temptation for endless tinkering. “While an independent pension commission sounds attractive – will politicians cede control over such an economically important part of the landscape, or over central issues such as how much of the national economy is spent on supporting older people?”
DC and DB differences
Kevin Wesbroom said: “Should any new system have different rules for DB and DC? Changes to the taxation of DC pensions can be relatively simple – either having a uniform employer tax relief system, or even a move to a full blown EET ISA style of tax relief. DB pensions struggle to fit into these simple approaches and there is a case for simply ring-fencing any existing arrangements. “The sad reality is that this would affect few in the private sector – the numbers would probably be below one million workers by the time any proposals came into force. Given a choice of huge administrative complexity do you shoe-horn DB into any new, simple, transparent and sustainable system – or simply leave it alone and let it wither on the vine? We favour the latter.”
LONDON, 7 July 2015 – Aon plc (NYSE:AON), the leading global provider of risk management and human resource consulting and outsourcing, plans to announce second quarter 2015 results on Friday, July 31st, 2015 in a news release to be issued before the market opens. Greg Case, president and CEO, will host a conference call at 7:30 am Central Time on Friday, July 31st, 2015. The conference call will be broadcast live through Aon’s website at www.aon.com. Adobe Flash is required to listen to this webcast. A replay will be available shortly after the live webcast. The earnings release and supplemental slide presentation will be available on Aon’s web site at www.aon.com.
Stronger Interest Rates, Decreases in Plan Liabilities Were Key Factors, According to Aon
LINCOLNSHIRE, Ill., July 7, 2015 /PRNewswire/ -- The funded status of U.S. pension plans improved in the second quarter of 2015, with the deficit declining by $81 billion for the quarter, according to an analysis by Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON).
According to the Aon Hewitt Pension Risk Tracker, which evaluates daily funded status for S&P 500 companies with defined benefit pension plans, second quarter aggregate pension funded status reached 83.4 percent, up from 80.7 percent in the first quarter of 2015.
"As interest rates improved over the quarter, overall plan liabilities decreased, leading to better funded status for U.S. pension plans," said, Ari Jacobs, Global Retirement Solutions leader at Aon Hewitt. "Moving into the second half of the year, pension plan sponsors will need to keep a watchful eye on changes to interest rates, which could cause volatility in funded status."
Funded status gains were largely driven by an estimated asset reduction of $57 billion, which was outpaced by a $138 billion reduction in liabilities year-to-date. Aon Hewitt's analysis also showed that 10-year Treasury notes were up over the quarter (0.41 percent) and credit spreads widened to 0.17 percent, resulting in a 0.58 percent increase in the discount rate for the quarter for the average pension plan.
Other key findings:
- Return-seeking assets appreciated with the Russell 3000 Index returning 0.1 percent.
- Bonds were significantly outperformed by equities, with the Barclay's Long Gov/Credit Index returning -7.6 percent.
- Pension assets returns were down 2.1% over the quarter.
Calls for productivity boosting measures in next week’s speech
LONDON, July 2, 2015 - Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has said that the longer-term health of UK plc should be the prime aim of measures in the Chancellor’s Summer Budget on 8 July.
Tapan Datta, global head of asset allocation at Aon Hewitt, said:
“Freed from the constraints of a coalition government and with some loosening of the fiscal straitjacket over the past year, this is not an ‘emergency’ budget. Of course, there is still a large budget deficit and the Chancellor will confirm the path towards eventual budget balance and show no fiscal largesse - that is a given. However, the key difference with this Budget is the potential shift in focus. After a prolonged period when the Exchequer’s financial fragility has been an overriding factor, it is time to move on.
“Given the Chancellor’s improving degrees of budgetary and political freedom, what the market would like to see are measures that help to boost UK PLC’s longer-term economic health. So far, tackling rising welfare spending has been a wholly dominant mantra of this government’s reform credentials – and worthy though this may be as an objective, our wish is that the focus should change to some of the other structural hurdles that impede UK economic performance. A better epithet to describe a budget that tackles these bottlenecks would be ‘productivity boosting.”
Tapan Datta continued:
“Given low levels of labour productivity growth in recent years, - which is widely acknowledged to be holding the economy and living standards back - a more concerted focus on this in the Budget would be highly desirable. Some of the causes of low productivity growth like the UK’s planning laws are beyond the Budget’s scope and politically difficult. However, the Chancellor could use tax incentives to boost what are still low levels of business investment and encourage lacklustre exports. Importantly, even a marginal simplification of the tax code would win plaudits given the inexorable rise in complexity over a number of years.”