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Aon responds to DWP consultation on the consolidation of defined benefit pension schemes

LONDON (7 December 2018) – Aon, the leading global professional services firm providing a broad range of risk, retirement and health solutions, has commented on the Department for Work and Pensions’ (DWP) consultation, ‘Consolidation of Defined Benefit Pensions Schemes’, which seeks views on a new legislative framework for authorising and regulating DB ‘superfund’ vehicles.

Matthew Arends, head of UK Retirement Policy at Aon, said:
“The DWP’s consultation brings much-needed clarity on the direction of travel that the DWP anticipates for these new consolidation vehicles. Having said that, in a number of key areas, the DWP has put forward several options for the future, which means there remains considerable uncertainty over the regime under which consolidators will operate.  This in turn will make transactions difficult in the short term.

“However, interestingly and for the first time, the consultation brings the prospect of The Pensions Regulator regulating the sponsoring company as well as the pension scheme itself.  Additionally, aspects of the regime for consolidators are much closer to that in operation for insurance companies than for other occupational pension schemes. This adds up to TPR taking on a much more involved supervisory role in the future.”

Matthew Arends continued:
“One aspect we had expected to see in the consultation but which hasn’t been included, is the accurate communication of the consolidator proposition to potential transferring trustees and companies.  We believe it is crucial that the risks and costs are transparently and accurately portrayed so that there is confidence in these vehicles.

“Related to this, is that there are no additional requirements to communicate with members prior to consolidator entry– other than the normal requirements for bulk transfers.  While we acknowledge that members will transfer without consent into the consolidator and that pensioner members will not be able to transfer out subsequently, we believe that additional member communications prior to entry – and which give more information about the consolidator vehicle – will be essential.”

Media Contact
For further information please contact:
Colin Mayes                                    Charlie Bristow
Aon                                                 Kekst CNC
01372 733689                                   07973 667291            

Notes to Editors
About Aon

Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
Aon announced in May 2018 it will retire the business unit brands of Aon Benfield and Aon Risk Solutions, which follows the retirement of the Aon Hewitt business unit brand in 2017. This move was designed to increase the rate of innovation across the firm and make it easier for colleagues to work together to bring the best of Aon to clients. Aon has five specific global solution lines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions and Data & Analytic Services.

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