News Feed Item

Aon Hewitt Survey Finds More Pension Plan Sponsors Revising Investment Policy to Effectively Manage Risk

More Companies Establishing Broad De-Risking Strategies Focused on Reducing Volatility and Risk Exposure

LINCOLNSHIRE, Ill., Jan. 29, 2014 /PRNewswire/ -- A new survey by Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), finds companies, in an effort to decrease pension risk exposure and insulate their plans from fluctuating economic conditions, are increasingly rethinking their investment strategies by realigning their plan assets to match the plan's liabilities.

(Logo: http://photos.prnewswire.com/prnh/20100719/AQ37264LOGO)

According to Aon Hewitt's survey of more than 220 U.S. companies with defined benefit plans representing 5.8 million workers, 62 percent of pension plan sponsors are somewhat or very likely to adjust their plan's investments to better match the liabilities in the year ahead, compared to just one-in-six that do so today. Some companies plan to go one step further and adopt dynamic investment policies or glide paths that increase exposure to fixed income and risk-hedging options as their plan's funded status improves. Twenty-two percent of employers currently have a glide path strategy in place. By the end of 2014, 30 percent of companies are expected to have embraced this approach.

"The strong market returns of 2013 improved the funded status of many employers' pension plans," said Rob Austin, director of Retirement Research at Aon Hewitt. "Implementing an investment policy that mirrors liability movements as underlying economic conditions change allows plan sponsors to lock in these gains. In addition to changing their investment policy, more companies are establishing holistic de-risking strategies to further guard their plan's funded status and reduce liabilities."

Aon Hewitt's survey also found that companies are adopting a more thorough approach to monitoring and managing pension risk by focusing on three key areas:


Understanding potential risk. Nearly a quarter (24 percent) of pension plan sponsors have  recently conducted an asset liability study to get a better picture of their plan's performance under varying economic conditions, double the number of companies that had done so in 2012. Of the companies that had not yet conducted a study, 45 percent are somewhat or very likely to do so in the next 12 months.


Monitoring funded status. One-in-eight employers have already established a method to monitor daily funded status of its plan, twice the number of employers than in 2012. One quarter of the plan sponsors that do not have this monitoring in place are somewhat or very likely to do so in 2014.

"Employers used to only evaluate their plan's funded status once each year when they were required to report on the plan's performance," explained Austin. "Now they understand that it is critical to have a real-time view of how market and economic conditions are impacting the plan to enable them to adjust and execute their investment strategy at a moment's notice."


Reducing liabilities. Pension plan sponsors continue to adopt strategies to limit their liabilities. Lump-sum settlements through a "window" are becoming increasingly popular. Twelve percent of plan sponsors recently introduced or expanded the availability of lump-sum windows for retirees or terminated vested participants, and 43 percent are somewhat or very likely to complete a lump-sum window for inactive participants during 2014.

"As PBGC premiums have increased, the fixed costs of maintaining a qualified pension plan have also increased, making it more desirable for plan sponsors to settle plan liabilities through lump-sum payouts," added Ari Jacobs, Global Retirement Solutions leader at Aon Hewitt. "These settlements allow companies to reduce their pension obligations while at the same time, give workers access to their retirement funds much earlier than planned."

Click here to read the full report.

Sign up for News Alerts:  http://aon.mediaroom.com/index.php?s=58
Follow Aon Hewitt on Twitter:

About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness.  Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide.  For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.

Media Contacts:
MacKenzie Lucas, 847-442-2995, [email protected]
Maurissa Kanter, 847-442-0952, [email protected]

SOURCE Aon plc

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Evan Kirstel is an internationally recognized thought leader and social media influencer in IoT (#1 in 2017), Cloud, Data Security (2016), Health Tech (#9 in 2017), Digital Health (#6 in 2016), B2B Marketing (#5 in 2015), AI, Smart Home, Digital (2017), IIoT (#1 in 2017) and Telecom/Wireless/5G. His connections are a "Who's Who" in these technologies, He is in the top 10 most mentioned/re-tweeted by CMOs and CIOs (2016) and have been recently named 5th most influential B2B marketeer in the US. H...
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
DXWorldEXPO LLC announced today that "Miami Blockchain Event by FinTechEXPO" has announced that its Call for Papers is now open. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expe...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
@DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises - and delivering real results.
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"We started a Master of Science in business analytics - that's the hot topic. We serve the business community around San Francisco so we educate the working professionals and this is where they all want to be," explained Judy Lee, Associate Professor and Department Chair at Golden Gate University, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.