LONDON 14 October 2014 - Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), has commented on the consultation paper issued yesterday by EIOPA (the European Insurance and Occupational Pensions Authority) on the Holistic Balance Sheet and Pillar I solvency requirements for Institutions for Occupational Retirement Provision (IORPs).

Previous announcements by the European Commission (EC), along with the publication of proposals for the IORP II Directive in March 2014, made the application of the solvency aspects of the Solvency II (for insurance companies) Directive to IORPs improbable, for at least the foreseeable future. However, EIOPA has continued to work on the Holistic Balance Sheet and how it might be used for measuring the solvency of IORPs. Yesterday’s  consultation paper gives further consideration to how the value of sponsor support might be measured and how new solvency requirements might be applied.

Colin Haines, partner at Aon Hewitt, said:
“Solvency II for Pensions keeps on rumbling along – but the European pensions industry is still not on board.  This legislative juggernaut looks to be picking up speed and we are now at a critical part of the journey. The next few months could be very important in determining its future direction and speed.

“Ultimately, a further round of proposals from the EC will just increase uncertainty around the regime for pension provision, which is the last thing the UK pension industry needs. The existing UK funding regime is working well. Along with the Pensions Protection Fund, the current regime has improved the security of member benefits.”

Colin Haines continued:
“Continued uncertainty is likely to discourage employers even further from any involvement in providing and promoting defined benefit pensions. Distracting sponsors and trustees and the wider industry from running their pension schemes is unlikely to improve members’ pension outcomes.”

Aidan O’Mahony, partner at Aon Hewitt, said:
“Although we believe that the continued EC obsession with pension solvency is unhelpful, we are pleased that the consultation paper now takes a more pragmatic approach, particularly in relation to valuing sponsor support.

“EIOPA now recognises that it may not be possible to devise a one-size-fits-all methodology and supports a principle based approach to the valuation of sponsor support. This is a step forward from the previous detailed specification of calculations to be applied to all IORPs which failed to recognise the variation in the nature of IORPs between countries.”

Media Contact:
Colin Mayes                                                        Marina Jane Sanchez
Aon Hewitt                                                          Capital MSL
01372 733689                                                     020 3219 8811
colin.mayes@aonhewitt.com                                marina.jane-sanchez@capitalmsl.com

Notes to Editors

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 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 66,000 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, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon’s global partnership with Manchester United.