Media room

Press releases—November 2015

Aon Hewitt's View on Retirement & Financial Wellness - Are Singapore Employers Doing Enough to Help their Workforce? (30 November 2015)
Aon says FCA review of asset management industry will debunk some market myths (20 November 2015)
2015 Records Lowest U.S. Health Care Cost Increases in Nearly 20 years (12 November 2015)
Unlocking the Business Secrets and Best Practices of Best Employers (5 November 2015)
72% of Organisations with Minimum Wage Employees Do Not Pay Workers Above Minimum Wage (4 November 2015)
Aon calls for DB pensioners to have same flexibilities as DC members (3 November 2015)

Aon Hewitt's View on Retirement & Financial Wellness - Are Singapore Employers Doing Enough to Help their Workforce?

Large gaps in retirement provisions

Singapore, 1 December 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON) conducted an inaugural survey on Retirement & Financial Wellness for Singapore Employers 2015. This reveals there are still large gaps in current retirement provisions.

As Singapore population rapidly ages and life expectancy significantly increases, employers’ role in helping their workforce adequately to plan for their retirement and being more proactive to facilitate retirement readiness that could drive employee engagement is becoming under scrutiny.

The Aon Hewitt survey participants representing multiple industries and organisation sizes, covering more than 37,000 employees have indicated that Singapore employers generally do not offer supplementary retirement plans. While 71% of the population comprising of Singapore citizens and Permanent Residents are eligible under the Central Provident Fund (CPF) scheme only about one in twenty companies offer arrangements to supplement the CPF mandatory contributions.

Three out of four companies in the survey do not offer retirement benefits to foreign employees, favouring cash allowances instead of more long-term financial protection.

The Aon Hewitt survey revealed that around half of the participants consider their companies’ current retirement support to be ineffective in retaining and attracting the right employees. Employers perceive that approximately 50% of non-CPF eligible employees, executives / high earners and those reaching retirement age are provided with ineffective retirement support.

Singapore employers are becoming increasingly aware that the current status quo is not sustainable.

While ‘Financial cost’ ranks as the primary concern for the survey participants, their focus in the next 12-24 months is to review their retirement arrangements. Managing benefits compliance and governance risk is also a concern, which survey participants see as priority to address.

About 25% of employers in the survey are stepping up to assist their workforce by providing avenues for financial wellness. These company-wide programmes and resources typically include encouraging more savings for retirement and financial goal setting, among others.

The ranking of the participants’ priorities in 2016/17 are as follows: 

Tasks to Review Ranking Importance
Benefits governance 1 High
Retirement arrangements for all employees 2
Retirement arrangements for executives and senior management 3
Retirement arrangements for non-CPF eligible employees 4 Medium
Retirement benefit design 5
Retirement arrangement investment choices 6
Survey employee preferences on retirement & financial wellness 7 Low

Shikha Gaur, Executive Director for Aon Hewitt’s Retirement and Wealth Management business in Singapore said: “Though most Singapore employers are still playing a passive role in supporting and encouraging employees to save for retirement, moving forward, we are seeing more employers implementing financial wellness programmes to help employees save enough for their retirement. This allows employees to feel less stressed, be more engaged and productive.”

From a Company point of view, Dimitris Efthyvoulou, Senior Consultant, Aon Hewitt added:
“Many companies are beginning to support financial wellness and retirement provision programmes so as to differentiate themselves, and increase their ability to attract and retain talent, and thus gain a sustainable business advantage.”


Aon says FCA review of asset management industry will debunk some market myths

LONDON, November 20, 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has responded to the announcement of a review of the asset management market by the Financial Conduct Authority (FCA).

Tim Giles, partner at Aon Hewitt said: “We welcome the FCA review as we feel it will provide a great opportunity to debunk some of the myths that surround the role of the investment consultant. In our view, the investment consulting market operates competitively, with many players and no barriers to entry. Pension scheme trustees are freely able to move to new providers and there is strong competition on price and quality. Market surveys also point to high levels of satisfaction. The standard of pension trustees has never been higher, and they make sure that they get the service they need from their investment consultants.

“Trustees and sponsoring employers now face improved choice as a result of competition driving innovation in the market. At Aon Hewitt we see our role as one of working with trustees and employers to improve their outcomes. We are totally focused on getting the best outcomes for our clients, in whatever way works best for them. If we tried to do anything else, our clients would not continue to employ us.”

Tim Giles continued: “We regard the advisory or fiduciary approaches to consulting as merely routes of implementation, and we are neutral between them. Our strategic advice to clients is structured to ensure that the solutions we suggest reflect this implementation neutrality. Once we have a firm understanding of the challenges and opportunities facing a client we propose a strategy that can be implemented however the client wishes. The client then has the choice of their preferred route of implementation. We constantly look at our routes to implementation to make certain they provide cost effective access to the deep subject expertise that we can offer to meet the demands of the complexities of investment markets. This ensures that we both maintain a quality approach and remain competitive.”


2015 Records Lowest U.S. Health Care Cost Increases in Nearly 20 years

- Rate of increase was 3.2%
- Average health care cost per employee topped $11,000
- Employees' share of health care costs have increased more than 134% since 2005

LINCOLNSHIRE, Ill., Nov. 12, 2015 /PRNewswire/ -- After plan design changes and vendor negotiations, a recent analysis by Aon (NYSE: AON) shows the average health care rate increase for mid-size and large companies was 3.2 percent in 2015, marking the lowest rate increase since Aon began tracking the data in 1996. Aon projects average premium increases will jump to 4.1 percent in 2016.

"The sluggish growth in the economy has deterred many individuals from using medical services, and there's also been modest price inflation--both factors have been primary drivers for the low rates of premium increases over the past few years," said Mike Morrow, senior vice president of Aon Health. "As prescription drug costs continue to grow at a double-digit pace and the economy picks up speed, it's likely these premium rates will start to climb."

Despite the low rate of increase, the average amount that employees need to contribute toward their health care has increased more than 134 percent over the past decade. According to Aon's analysis, employees contributed $2,490 toward the premium and another $2,208 in out-of-pocket costs, such as copayments, coinsurance and deductibles in 2015. In contrast, the amount of employees' premium and out-of-pocket costs combined in 2005 was just $2,001.

Employer Actions to Mitigate Trend
According to Aon, low rate increases are prompting most employers to take a traditional 'managed trend' approach to mitigating health costs in the short term, though some non-traditional approaches are emerging.

Cost sharing. According to Aon, the percent of total health care costs covered by employers has decreased about 1 percent per year since 2012. Recent Aon research shows 38 percent of employers have increased participants' deductibles and/or copays and another 46 percent may do so in the near future.

Using high-deductible health plans (HDHPs) –HDHPs are the second most popular plan choice offered by companies, surpassing HMOs. 16 percent of companies offer a HDHP as the only health plan option today, and another 41 percent are considering doing so in the next three-to-five years. 

Managing dependent eligibility and subsidies – Aon Hewitt's research shows:

  • 18 percent of companies have reduced subsidies for covered dependents, while 17 percent added a surcharge for adult dependents with access to other health coverage.
  • 43 percent of companies are considering using unitized pricing--where employees pay per person and not individual versus family.
    Adopting pay-for-performance strategies – These include:
  • Steering participants (through plan design or lower cost) to high quality hospitals or physicians for specific procedures or conditions (22 percent)
  • Offering value-based insurance design approaches (28 percent)
  • Adopting reference-based pricing--where employers set a pricing cap on benefits for certain medical services for which wide cost variation exists with no discernible differentiation in quality (6 percent). Another 53 percent plan to do so in the next three-to-five years.
    Implementing effective pharmacy management programs – According to Aon, an increasing number of employers are adjusting pharmacy design components to encourage the use of generic drugs. This includes using coinsurance rather than copays for brand drugs and by introducing mandatory generic and step therapy programs.
Aon Health Care Cost Analysis
Year % Increase Total Premium Cost Per Employee Average Employer Share of Premium Average Employee Share of Premium Average Employee Out-of-Pocket Cost
2016* 4.1% $11,484 $8,849 $2,635 $2,433
2015 3.2% $11,032 $8,542 $2,490 $2,208
2014 4.4% $10,686 $8,325 $2,361 $1,955
2013 3.3% $10,237 $8,000 $2,237 $1,708
2012 4.9% $9,906 $7,770 $2,136 $1,514
2011 8.5% $9,447 $7,421 $2,026 $1,425
Cost By Plan Type
Year HMO POS PPO National
2016* 4.1% 4.1% 4.1% 4.1%
2015 4.2% 2.5% 3.1% 3.2%
2014 3.9% 5.5% 4.4% 4.4%
2013 4.9% 4.5% 2.7% 3.3%
2012 5.5% 3.8% 4.7% 4.9%
2011 8.0% 11.5% 8.2% 8.5%
Year HMO POS PPO National  
2016* $11,696 $12,395 $11,344 $11,484  
2015 $11,235 $11,907 $10,897 $11,032  
2014 $10,783 $11,622 $10,570 $10,686  
2013 $10,377 $11,016 $10,127 $10,237  
2012 $9,895 $10,540 $9,862 $9,906  
2011 $9,379 $10,154 $9,420 $9,447  

About the Data
Aon Hewitt's data is derived from the Aon Hewitt Health Value Initiative database, which captures health care cost and benefit data for more than 600 large U.S. employers representing 11.7 million participants, more than 1,200 health plans and nearly $59 billion in 2015 health care spending.



Unlocking the Business Secrets and Best Practices of Best Employers

Aon Hewitt and Sasin share the Best Employers’ value proposition and outlook into 2016

Bangkok, November 5, 2015 – Today Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), and global leader in human resources consulting and outsourcing solutions, and Sasin Graduate Institute of Business Administration of Chulalongkorn University held a media briefing to launch the 8th annual Best Employers – Thailand 2016 Program at Sasin Royal Hall, Chulalongkorn University. Guest of Honour Mrs. Vilasinee Puddhikarant, Chief Customer Officer of Advanced Info Service (AIS) shared the experiences that led to AIS becoming a Best Employer in Thailand for the second consecutive year.”

Professor Dipak C. Jain Ph.D., Director of Sasin Graduate Institute of Business Administration of Chulalongkorn University, said, “One of the drivers of business success in the 21st century is the ability to acquire and retain human talent. Sasin has been a proud partner of Aon Hewitt for 15 years because, in addition to recognizing the best employers in Thailand, this program focuses on knowledge creation and dissemination – sharing best practices with all of the participants – which is also at the heart of Sasin’s mission as a school of management.”

Assoc. Prof. Dr. Siriyupa Roongrerngsuke, Director - HRM Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University and Honorary Research Fellow in HRM and Leadership of Birkbeck College, University of London has shared her experience as a chairman of the judging panel in the Best Employers program :“One of the major reasons that Sasin decided to partner with Aon Hewitt in conducting the Best Employers program in Thailand for more than a decade is our devotion to the academic excellence in Human Resources studies. We focus on the accuracy of the research methodology, and the 360-degree data collection from CEO, HR unit, and employees. Besides thevery strict research methodology, the judging members have extensive knowledge and experience in different management functions. Thus we can ensure that the results of the judging panel represent world-class standard. The process is fair and transparent as the judges are not allowed to know the name of any participating organisations. And for the participating organisations, joining the studycan be compared to a big “check-up” for them. They learn details about their strengths and weaknesses and about their people management in comparison to otherorganisations that are excellent in people practices. So they can improve their practices with more focus.”

Dr Adisak Chandprapalert, Managing Director of Aon Hewitt Thailand, discussed the relevance of the Best Employers program to the business community, especially to those in the human resources field. He said: “This annual study highlights the human resources-related factors that can expand an organisation’s capabilities and its ability to gain a sustainable business advantage on a journey to become a Best Employer that every employee would like to work for. This program aligns with Aon Hewitt’s vision of empowering organisations and individuals to secure a better future through innovative human capital solutions”. In his remarks at the media briefing, Dr Adisak focused on the “challenges facing modern CEOs and the in-depth key findings from the Best Employers – 2015 Program”.

According to the IMF, Thailand’s economy is currently in a recovery phrase and Thailand’s CEOs remain confident regarding the growth of their organisations. Nevertheless, human resources management poses the most challenge to both Thai and Asian’s CEOs. According to Best Employer’s research, CEOs in Thailand believe that critical skill shortages, rising salaries, and an inadequate leadership pipeline present the top human resources challenges. “Human factors have posed the top challenges for Thai management for many years. It is a shocking fact that many organisations do not have an expedient backup plan to manage this risk”, said Dr Adisak. He continued: “The organisations that have been recognised as Best Employers are more ready in all aspects of human resources management. They exhibit high employee engagement, a compelling employer brand, effective leadership, and a high-performance culture – all are important factors that create sustainable business growth.”

Ms. Jutharat Winitchaiyanan, Best Employers 2016 Project Manager at Aon Hewitt Thailand said, “The Best Employers study demonstrates that the HR department is an important mechanism that drives the organisation towards success.” This perspective aligns with the findings from 400 CEOs in Asia and underscores the strategic importance of the HR role in business.

Moreover, Ms Jutharat revealed that the key to the success of every Best Employer is based on HR’s active role in business development in:
1. determining the HR strategy in relation to other business functions;
2. the alignment of different stakeholders through strong communication and action planning; and
3. placing greater emphasis on work process by benchmarking with external organisations and prioritising the work results.
The Best Employers program results demonstrates that companies recognised as Best Employers have better business outcomes compared to other organisations in both revenue and profit. Therefore, HR is no longer limited to simply “managing human capital”; it exerts a clear impact on business outcomes.

Mrs. Vilasinee Puddhikarant, Chief Customer Officer of AIS, recognised as a Best Employer for two consecutive years, said:
“The Best Employers is an award to prove that our organization values our employees and our effort has been recognized by the world’s international standard. Most importantly, it guarantees that AIS Call Center’s success comes from our employee’s believes and confidence in the future of our organization. Therefore they are willing to put in their full effort in their works in order to grow and develop sustainably together with the organization”.

Ms. Jutharat Winitchaiyanan commented:
“Many organisations are concerned about participating in the Best Employers program because they look on it as a competition. Therefore, they say they will participate only when they feel ready. But in fact, their level of readiness will be enhanced by active participation in Best Employers. The decision to participate in the Best Employers program marks the start of the journey toward becoming a Best Employer.”

Thai language version of this press release is available, please contact


72% of Organisations with Minimum Wage Employees Do Not Pay Workers Above Minimum Wage

New Aon Research: Employees and Consumers Expected to Feel Cost Impact of a Minimum Wage Increase

LINCOLNSHIRE, Ill., Nov. 4, 2015 /PRNewswire/ -- Despite recent reports showcasing organizations that are increasing employees' pay above the minimum wage, new research from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), reveals that 72 percent of organizations with minimum wage employees currently do not have a plan to pay those employees above the mandated rate. Additionally, of those organizations, 59 percent reported they will not address any changes until minimum wage increases become law. In the interim, they plan to adjust wages, as needed, through current salary review cycles.

Aon Hewitt's survey examined responses from 135 major U.S. organizations that employ labor at minimum wage, and was developed to better understand how employers are likely to address the impact of a government mandated increase to minimum wage rates.

"The majority of employers are taking a 'wait-and-see' approach, and do not plan to make any changes until new regulations are issued and they assess the actions of their competitors," said Ken Abosch, broad-based compensation practice leader, Aon Hewitt. "Organizations are very sensitive about increasing one of their largest fixed costs and overall expense categories, and many of them simply don't see any advantage to increasing their labor costs at this time."

The remaining 28 percent of organizations that are taking actions before the required regulations expect doing so will position them as having a competitive advantage in attracting new workers (77 percent) and lowering turnover or increasing retention (76 percent).

Impact on Employees and Consumers
Whether organizations decide to voluntarily increase minimum wage, or wait for the government to put forth and pass a law, according to Aon, if minimum wage increases, the way compensation is administered will be impacted across the organization. Surprisingly, 49 percent of organizations reported they will adjust only those currently at minimum wage. Just 33 percent of employers say they would adjust those currently at minimum wage, as well as the positions above to continue to appropriately differentiate between levels, and minimize compression.

"Regardless of their approach, it is clear organizations will be faced with the challenge of having to counterbalance for the additional fixed costs that increasing wages will incur," said Abosch. "What organizations will choose to do will vary, but employees and consumers will likely feel the greatest impact. Nearly half (47 percent) of the actions organizations are actively considering to offset increased costs may actually undermine the value that an increased minimum wage was supposed to deliver to low income workers."

When asked how organizations are dealing with the cost impact resulting fromincreases in minimum wage, most responses revealed that organizations will push the burden down to employees by reducing or eliminating overtime (36 percent) or increasing prices (30 percent) for consumers.

What employers are doing What employers are not doing
Increasing prices of goods or services (30%) Shutting down or relocating operations (99%)
Lowering headcount (12%) Decreasing bonus targets or funding (96%)
Using automation to replace work (14%) Decreasing PTO (99%)
Hiring more part-time employees (19%) Decreasing 401k contributions/matches (99%)
Redefining work (23%) Outsourcing activities/jobs (98%)
Reducing overtime worked (36%) Shutting down or relocating operations (99%)



Aon calls for DB pensioners to have same flexibilities as DC members

LONDON, November 3, 2015 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has called upon the Department for Work and Pensions (DWP) to allow pensioner members of defined benefit (DB) schemes to have access to similar freedoms to those now available to members of defined contribution (DC) schemes under the government’s Freedom and Choice measures, and also to the proposed secondary annuity market.

Aon Hewitt is asking for legislation which would permit a pensioner in a DB plan to be able to surrender future increases attaching to that pension (both statutory and non-statutory increases) in return for:

  • a taxable cash sum
  • an increased non-increasing pension
  • another type of increasing pension
  • or a mixture of these, as agreed between the member and the trustees of the scheme

Any alternative benefit should be certified by the scheme actuary, for example on the basis of the cash equivalent approach, which gives a best estimate of the value of the benefits being exchanged. Legislation would enable trustees to offer these options to members, subject to employer consent.

Kevin Wesbroom, senior partner at Aon Hewitt, said: “While many DB schemes have adopted Pension Increase Exchange exercises which give pensioners an opportunity to reshape their pension income, we believe that DB members should have the full range of options in relation to the increases attaching to their pensions. Members could choose to retain the inflation protection they have on their pension, or an immediate cash lump sum (taxable at their marginal rate) or a higher current income. We believe this would give members the option to take benefits that suit their personal circumstances.

“This thinking is fully in line with the Freedom and Choice agenda – but with the added protection for DB members that they cannot touch their basic level of DB pension. Taking out the inflation proofing element – with its complex caps and collars and references to different measures of inflation - would enable trustees and employers to finance benefits more efficiently.”

Aon Hewitt tested this concept in a poll at the recent PLSA conference in Manchester.

Matthew Arends, partner at Aon Hewitt, said:
“We asked an audience of pensions professionals if they agreed that pensioners should have the right to transfer or have access to their DB benefits. Nearly three-quarters of them supported the idea of greater flexibility for pensioners – giving a very clear indication that the industry would support a move to greater personal freedom and responsibility for DB pensioners.”

Ben Roe, partner and head of Liability Management at Aon Hewitt, said:
“This has the potential to be a win-win-win position. Some members would enjoy extra flexibility and opportunities, rather than being forced into the straightjacket of a single pension type. Employers and trustees will find this could have a positive effect on long-term financing plans, as well as making the task of investment and hedging of pensions easier and hence cheaper. And the taxman is likely to gain from the acceleration of tax receipts.”