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Centralization of Employee Benefits Governance on the Rise for Multinational Organizations
Aon Hewitt and American Benefits Institute find best practices in global benefits governance lead to better risk management


LINCOLNSHIRE, Ill. and WASHINGTON, D.C. (August 1, 2016) – Multinational companies face increasing cost pressures and rising risk when it comes to managing their employer-sponsored benefits programs around the world. A new report from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON) and the American Benefits Institute, the research affiliate of the American Benefits Council, a benefits policy advocacy organization, reveals these mounting challenges are continuing to drive the centralization of global benefits management.  

Aon Hewitt and American Benefits Institute surveyed more than 200 multinational corporations around the world to determine their current and expected approach to global benefits management. The study found that while 70 percent of organizations have some form of corporate guidelines and controls in place, they still struggle to effectively manage their global benefits centrally. 

“Market volatility, rising costs, competitive pressures and regulatory changes are driving the desire to manage benefits more centrally by multinationals,” explained Amol Mhatre, senior partner at Aon Hewitt. “Without information to make good decisions, and operational infrastructure and the governance discipline to execute decisions on the ground, companies will continue to struggle to mitigate risks posed by their benefit programs.”  

Aon Hewitt and American Benefits Institute discovered that only 20 percent of firms are leading the way as “best practice” organizations. Key differentiators included:     

•    The best practice organizations generally have the information they need to make risk management decisions. By comparison only 20 percent of “other” organizations have access to necessary data to understand their risks, and monitor risks and opportunities on an ongoing basis.  
•    93 percent of best practice companies have established global centers of expertise (COE) to manage benefit programs, while 51 percent of other organizations use a global COE model. 
•    87 percent of best practice organizations conduct formal audits to ensure that local benefits are aligned with global policies, compared to just one quarter of other organizations.
•    56 percent of leading companies say, with a high degree of confidence, their benefit programs are in line with their workforce strategy; by comparison only 6 percent of other companies are confident that their benefits are in line with their workforce strategy.

“The financial cost of plan sponsorship is significant. In some ways the management of these programs across multiple continents represents an even more daunting challenge,” said James A. Klein, president of the American Benefits Institute. “Compliance with myriad regulations may always be difficult, but this study shows how the world’s ‘best practice’ plan sponsors thrive in a competitive global business environment.”

According to Aon Hewitt and American Benefits Institute, best practice organizations excel in five key areas:     

1.    HR and finance have central access to data and market information on their global benefits programs
2.    Understand benefits costs, risks and opportunities
3.    Have well-defined risk management policies
4.    Have an operating model with roles and responsibilities defined at the local, regional and corporate level
5.    Monitor and report risks on an ongoing basis  

About the American Benefits Institute
The American Benefits Institute is the education and research affiliate of the American Benefits Council. The Institute conducts research on both domestic and international employee benefits policy matters to enable public policy officials and other stakeholders to make informed decisions. The Institute also serves as a conduit for global companies to share information about retirement, health, and compensation plan issues.

About Aon
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 72,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative risk and people solutions. For further information on our capabilities and to learn how we empower results for clients, please visit:

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Media Contact:
For Aon Hewitt: MacKenzie Lucas, 847.442.2995,
For American Benefits Institute: Jason Hammersla, 202.289.6700,

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