LONDON (30 March 2017) – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has launched ‘Fruition’, a new investment and governance solution aimed specifically at smaller pension schemes.
At a time when regulatory and governance concerns are on the minds of trustees of all sizes of scheme, the pressures on smaller schemes with limited resources are particularly strong. Aon Hewitt has found that these schemes are increasingly seeking integrated solutions – combining, for example, investment and/or actuarial advice and administration. Similarly, many of these schemes are now looking to a delegated approach to handle their investment.
To meet this demand, Aon Hewitt has launched Fruition, an investment and governance solution which is purposely designed for smaller schemes with £5 million upwards of assets.
Sion Cole, senior partner and head of European Distribution at Aon Hewitt, said:
“While we continue to see interest in fiduciary management at all ends of the scale, it has become apparent that smaller schemes’ needs are distinctive and require services that meet them more specifically.
“It’s clear that for schemes with relatively limited resources, an integrated approach - where they can work with us via a mix of services - works best. But to meet their investment needs, we have designed Fruition which actively addresses the three big investment risks – growth asset risk, interest rate risk and inflation risk.”
Fruition deals with these risks in two combined ways:
1. A fully diversified growth portfolio that aims to help schemes to achieve returns while also smoothing these returns to give greater certainty of outcomes
2. A liability matching portfolio that aims to protect the scheme by making sure the assets move in line with the liabilities. This means schemes can expect decreased funding level volatility and a smoother journey to their end-goal.
Aon Hewitt's fiduciary management business, Delegated Consulting Services, is focused on helping trustees and sponsors to improve scheme funding levels and, ultimately, pension scheme member security through delegation of the day-to-day activities. Fruition has been designed to address the needs of smaller schemes, offering bespoke investment objectives, fixing the appropriate level of hedging, and constructing a more efficient portfolio as part of the solution and in a cost-effective way.
- a return seeking growth portfolio diversified by asset class, strategy and manager,
- a liability matching portfolio based on a typical scheme’s liability profile (with 20yr duration),
- flexibility so schemes can target their desired level of return and reflect their own unique fixed/inflation-linked liability profile,
- quick and easy investment through an application form (no Investment Management Agreement),
- a reduced governance burden for trustees with only one manager to monitor.
Sion Cole said:
“Fiduciary management has tended to be seen as an option for medium-sized schemes. That is now changing with more large schemes also taking this route as they take advantage of the greater flexibility and tailoring available. But for the smaller scheme, an adapted version of the established approach was needed to make it both effective for the members and economical for the scheme. We have designed Fruition to meet those demands - and we are already seeing considerable market interest.”
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Notes to Editors
For information on Aon Hewitt’s fiduciary management services:
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