CHICAGO (January 9, 2006) - For the first time ever, state and local governments will be required to account for their long-term obligations to pay retiree health benefits, and publicly disclose the annual cost to fund this liability. The Government Accounting Standards Board (GASB) issued this mandate, which represents a significant financial obligation, as most governments today pay current-year healthcare costs without recognition of the long-term expense or how these costs are accruing for active employees. Aon Consulting, a leading global human capital consulting firm, believes the actuarially determined healthcare expense (a GASB 45 requirement) could be five times to ten times higher than the current healthcare expense per state.

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Tom Vicente and Don Rueckert, nationally recognized GASB experts and actuaries with Aon Consulting, are available to explain this new rule and discuss its significant impact on governments nationwide. These experts can answer questions such as the following:

   - Why is GASB instituting this policy now?
   - How will governments offset this financial impact?
   - What programs are most likely to be reduced or eliminated as a result
     of this mandate?
   - What will be the long-term effect on these governmental entities and
     their employees?
   - How will this impact the private sector?

  Financial Impact of GASB 45

Approximately 40,000 governmental and public entities will be required to adopt GASB 45. While only a few states have disclosed their retirement healthcare estimates thus far, the total is already approximately $80 billion in liabilities. This is four times the PBGC deficit (approximately $20 billion), and more than 30 percent of the post-retirement medical debt of Corporate America (approximately $250 billion).

To arrange an interview with an Aon Consulting expert, please contact: Joe Micucci, Aon Consulting, 312-381-4786, joe_micucci@aon.com.

This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to implement the stock repurchase program, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission.

PRNewswire - Jan. 9

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SOURCE: Aon Consulting

Web site: http://www.aon.com/