London, 5 December, 2013 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), has said that changes to the state pension age, announced in today's Autumn Statement present various implications for employers.

James Patten, head of Pension Benefit Design at Aon Hewitt, said:

“The changes in state pension age reflect the reality that given the rise in life expectancy, most of us will simply need to continue working for longer. Following the Chancellor's statements on how state pension age should be increased in future; it will be interesting to see whether employers with DB schemes would look to link their normal pension age to state pension age if offered the opportunity under the defined ambition proposals. DWP should consider revisiting some of their proposed protections for those within 10 years of normal pension age for such a change to be effective.”

Regarding Defined Contribution (DC) schemes, James Patten added:

“For younger employees in DC plans, the increase in state pension age follows a reduction in their projected state pension from around £10,000 per year to £7,500 per year - the result of reforms to move to a single tier state pension system announced earlier in the year. There will therefore be a greater emphasis placed on occupational and private savings as individuals rely less on the State.

“Of course, the whole concept of retirement will be different for this generation - with many working part-time in later life. But this is an issue for employers to grapple with, as well as employees. Employers can help address some of these issues through greater encouragement of their workforce to save for retirement and to ensure their DC arrangements are really effective.

“With greater responsibility placed on occupational and private retirement savings, rather than on the State, we would encourage government to take the current opportunity to implement legislation that supports Collective DC pension schemes, leading to improved and more stable member outcomes."

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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.
 

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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.