Aon is a leading global professional services firm that provides a wide range of risk, retirement, and health solutions. When it comes to pension expert advice, Aon has a team of experienced professionals who can help individuals and organizations navigate the complexities of pension planning. With a deep understanding of the pension landscape, Aon's experts can provide tailored guidance on pension scheme design, governance, and management, as well as pension investment and risk management.
Pension Scheme Design and Governance
Aon’s pension experts can help organizations design and implement pension schemes that meet their specific needs and goals. This includes defining the scheme’s objectives, determining the level of benefits, and selecting the most appropriate type of scheme, such as a defined benefit (DB) or defined contribution (DC) scheme. Aon’s experts can also provide guidance on pension scheme governance, including the establishment of a governance framework, the selection of trustees, and the development of an investment strategy.
Trustee Services
Aon’s trustee services team can provide independent trustee services to pension schemes, helping to ensure that the scheme is managed in the best interests of its members. This includes providing guidance on investment decisions, monitoring the scheme’s funding position, and ensuring compliance with regulatory requirements. Aon’s trustee services team can also provide support with scheme governance, including the development of a governance framework and the selection of investment managers.
| Pension Scheme Type | Key Characteristics |
|---|---|
| Defined Benefit (DB) Scheme | Benefits are based on a formula that takes into account salary and length of service |
| Defined Contribution (DC) Scheme | Benefits are based on the amount of contributions made and the investment returns earned |
| Hybrid Scheme | Combines elements of DB and DC schemes, offering a mix of defined benefits and contribution-based benefits |
Pension Investment and Risk Management
Aon’s pension experts can provide guidance on pension investment and risk management, helping organizations to develop an investment strategy that meets their scheme’s objectives and manages risk effectively. This includes selecting investment managers, monitoring investment performance, and managing risk through hedging and other strategies. Aon’s experts can also provide support with liability-driven investment (LDI) strategies, which aim to match the scheme’s assets with its liabilities, reducing the risk of funding shortfalls.
Liability-Driven Investment (LDI) Strategies
LDI strategies involve investing in assets that are designed to match the scheme’s liabilities, such as bonds and other fixed-income securities. This approach can help to reduce the risk of funding shortfalls and provide more stable returns. Aon’s pension experts can help organizations develop an LDI strategy that meets their scheme’s objectives and manages risk effectively.
- Assessing the scheme's liabilities and determining the optimal asset allocation
- Selecting investment managers and monitoring their performance
- Implementing hedging strategies to manage interest rate and inflation risk
- Regularly reviewing and updating the investment strategy to ensure it remains aligned with the scheme's objectives
Pension Administration and Governance Support
Aon’s pension experts can provide support with pension administration and governance, helping organizations to ensure that their scheme is being managed efficiently and effectively. This includes providing guidance on regulatory compliance, scheme documentation, and member communication. Aon’s experts can also provide support with scheme governance, including the development of a governance framework and the selection of trustees.
Regulatory Compliance
Aon’s pension experts can help organizations ensure that their scheme is complying with all relevant regulatory requirements, including those related to scheme governance, investment, and member communication. This includes providing guidance on the Pensions Act 2004 and the Occupational Pension Schemes (Governance) Regulations 2014.
| Regulatory Requirement | Key Implications |
|---|---|
| Pensions Act 2004 | Requires schemes to have a statement of investment principles and to disclose certain information to members |
| Occupational Pension Schemes (Governance) Regulations 2014 | Requires schemes to have a governance framework and to disclose certain information to members |
| General Data Protection Regulation (GDPR) | Requires schemes to protect member data and to disclose certain information to members |
What is the difference between a defined benefit and defined contribution pension scheme?
+A defined benefit pension scheme provides a guaranteed level of benefits based on a formula that takes into account salary and length of service. A defined contribution pension scheme, on the other hand, provides benefits based on the amount of contributions made and the investment returns earned.
What is liability-driven investment (LDI) and how can it help pension schemes?
+Liability-driven investment (LDI) is an investment strategy that involves investing in assets that are designed to match the scheme's liabilities, such as bonds and other fixed-income securities. This approach can help to reduce the risk of funding shortfalls and provide more stable returns.
Aon’s pension experts can provide comprehensive advice and support to help individuals and organizations navigate the complexities of pension planning. With a deep understanding of the pension landscape and a range of specialist services, Aon can help organizations develop a tailored pension strategy that meets their specific needs and goals.
