LONDON, 27 March 2014 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has commented on the IORP II Directive, released this morning by the European Commission.

Paul Bonser, head of Aon Hewitt's cross-border pensions consulting team, said:
"It is disappointing that the fully funded requirement for cross-border pension funds remains in the directive.  The European Commission has retained a key barrier to activity as cross-border pension funds continue to be treated more harshly than non-cross-border funds. It is effectively discrimination - which the European Commission is trying so hard to erase in most other areas. Many within the pensions industry will question why this was reintroduced from the previous leaked version which was recently in circulation. This will undoubtedly continue to limit the ability of multinationals, headquartered in certain markets such as the UK, Netherlands, Germany and Ireland, to use their home country pension funds for cross-border activity.

"There are however some silver linings. There are new rules to ease the transfer of assets and liabilities between IORPs in different countries.  This is particularly welcome and will enable multinationals to implement much more easily in the future.  Also, supervisory authorities must give clear reasons if they don't approve cross-border activity, and IORPS will have a right to take legal action if authorities refuse or fail to act.  These changes will still mean it will be even easier to set up cross-border arrangements than is currently the case."

Thierry Verkest, Aon Hewitt lead adviser and actuary to some of the largest cross-border plans in Europe, said:
"The new proposals mean that Belgium and Luxembourg will remain the destinations of choice for cross-border pension funds.  This is due to the positive approach from countries' governments, strong local governance requirements, and pro-active supervisory involvement.  Multinationals headquartered in the UK, Germany, Netherlands, France, Switzerland, and USA are currently setting up cross-border plans in Belgium and Luxembourg, and are doing this without needing to change member benefits. 

"Given it will be easier to transfer assets and liabilities to cross-border plans, we expect existing cross-border plans to grow, and for more multinationals to set up their own European-wide pension funds for both DB and DC.  Furthermore, as multinationals realise that they do not need to change benefits or be treated differently for tax purposes, the interest in cross-border plans is likely to grow even further."
 

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
 

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 reinsurancebrokerage, and human resources solutions and outsourcingservices. Through its more than 66,000 colleagues worldwide, Aonunites to empower results for clients in over 120 countries via innovativeand effective riskand peoplesolutions 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.comfor more information on Aon and www.aon.com/manchesterunitedto learn about Aon’s global partnership and shirt sponsorship with Manchester United.
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