LONDON, 6 June 2013 Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has said that while the UK pension industry is relieved that the most damaging aspects of Solvency II for pension schemes have been avoided, issues still remain.  The most pressing of these is the need for proportionality in the future regime - that is, making legislation which is as appropriate for small schemes as it is for big schemes.

Kevin Wesbroom, senior partner at Aon Hewitt, said:
"It's tempting in the light of the 'triumph' of keeping the worst aspects of Solvency II out of legislation to think that the battle is won.  It's not often that we have the opportunity to save our clients - and UK plc - the best part of half a trillion pounds - and it took a huge amount of work both in front of and behind the scenes to make it happen.  But this isn't the time for the industry to sit back - if anything it's a case of "once more into the breach dear friends!" The idea that UK schemes will be asked to pay a levy to continue work on these proposals suggests that the European Commission (EC) is still not in its best listening mode."

The EC has confirmed that it intends to proceed with its proposals to extend to pension schemes the Solvency II Pillar 2 requirements which relate to governance and risk management, and the Pillar 3 requirements which relate to standardised disclosures to supervisors and to members.

Kevin Wesbroom continued:
"There are some very good and powerful parts in the risk management framework that codify the way that the best schemes already arrange their affairs – these look at the risks they face and the mitigations and opportunities available to them. They would be the European equivalent of the Complete Financial Management plans that the UK Pensions Regulator has talked about and represent best practice among our leading clients.

"However, from the standpoint of UK schemes, the big issue is whether the EC can draft legislation which is genuinely proportionate - as suitable for the £50m scheme as for the one worth £5bn.  There are plenty of lightly resourced UK schemes in the small to medium end of the market - and we have to keep up the fight to ensure that they are subject to the right legislation. Governance of the vast swathe of small to mid-sized schemes that are a feature of the UK pensions landscape will be a significant regulatory challenge in the years ahead for both UK and European regulators."

Media Contact: 

Colin Mayes                                    Adam Leviton
Aon Hewitt                                       Capital MSL
01372 733689                                  020 7307 5339
colin.mayes@aonhewitt.com  adam.leviton@capitalmsl.com
 

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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 61,000 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.