London, 26 June, 2014 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), has welcomed the publication of the draft Pensions Bill and the Department for Work & Pension’s (DWP) response to its consultation on Defined Ambition plans, and in particular, the response on the proposed legislation for permitting Collective Defined Contribution (CDC) plans.

Kevin Wesbroom, senior partner at Aon Hewitt, said:
"Many of the features of CDC plans that we have advocated are incorporated in the draft Bill. In particular, Steve Webb has made it crystal clear that an employer's obligation will be limited to the contributions paid – so there is no danger of the plan morphing into a defined benefit scheme.  This will give many employers the reassurance they need, to consider these arrangements seriously when they grapple with the consequences of the Budget and the cessation of DB contracting out."

Matthew Arends, partner at Aon Hewitt, said:
"The Bill sets out the basic framework for how Collective DC plans will need to operate. Much of the structure builds on the work we have undertaken – including the use of target benefits representing a reasonable estimate of the benefits a member can expect to receive from the scheme.  Scheme funding would focus on the likelihood of delivering the target benefits.  Other features, such as a strong governance culture, quality communication to members and public disclosure of CDC plan finances, build on what we have learnt from the way these plans operate best around the world."

Kevin Wesbroom concluded:
"Steve Webb, in his foreword to the consultation, throws out the challenge – “why shouldn't the UK have access to pensions that are viewed as among the best across the globe?”  We believe that Collective DC plans have a role to play in improving the retirement outcomes for millions of UK workers, offering higher, more stable outcomes than individual arrangements, and a means in by which members are not asked to take complex decisions regarding their retirement savings - and how to convert those into a regular income."
 

Media Contacts: 

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 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 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, 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.