London, 16 September, 2013 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has said that pension schemes may be under-estimating the issue of GMP (Guaranteed Minimum Pension) reconciliation and need to form a strategy to deal with what can be a lengthy, complex and costly process.

GMP reconciliation is the comparison of membership and GMP figures between administrator and HMRC records. GMP can represent a significant proportion of a member’s benefit and if recorded inaccurately will mean pension payments may have been incorrect. The exercise commonly uncovers underpayments and overpayments, and is notorious for being complex. In 2009, the National Audit Office discovered that five public sector schemes had overpaid pensioners by over £90M due to GMP errors. 

Colin Hamilton, Commercial Director for Benefits Administration at Aon Hewitt, said:

“In Aon Hewitt’s Benefits Administration Survey 2013, only 6% of respondents said that GMP reconciliation was among their priority projects for the next 12 months. They may well – quite understandably – be distracted by the demands of, for example, auto-enrolment or changes to benefit design.  But GMP reconciliations are linked to a number of other industry-wide developments which affect schemes, notably the abolition of defined benefit contracting out in 2016, the Pensions Regulator’s push for clean data and GMP equalisation.

"Some of our clients are recognising that this is an issue which needs to be dealt with and many more will be doing so in the near future.  With that in mind, Aon Hewitt has linked with specialist consulting firm GMP Managed, to form a dedicated GMP reconciliation solutions team within our Benefits Administration business. This team will develop tools and processes to aid schemes in forming a strategy and reaching solutions."

In addition to the data-driven aspects of the work, Aon Hewitt is also developing materials to guide trustees through the process and to help make key decisions easier to understand.  This includes trustee training modules and an ‘Introduction to GMP’- educational sessions which are open to all schemes.

Matt Ashton-Smith Managing Director of GMP Managed, said:

“We expect to see particular interest from schemes which handle their administration in-house – and who therefore tend to have little or no experience of a GMP reconciliation. For these schemes, finding the resource to deliver these potentially large and complex projects may be challenging. Some will need full support in both forming a strategy and completing the process.

“Working together with Aon Hewitt, we now have the tools, knowledge, technology and resource to steer trustees through yet another challenging period.” 

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About Aon Hewitt

Aon Hewitt empowers organisations 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 organisational 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:

Colin Mayes
Aone Hewitt
0 1372 733689
colin.mayes@aonhewitt.com

Giles Abbott
Capital MSL
020 7307 5340
giles.abbott@capitalmsl.com