Aon Consulting Survey Reveals Economy's Impact on Pension Funding and Expense
10 Novembre 2008 - 2:30PM
PR Newswire (US)
It's time to rethink how defined benefit and defined contribution
plans are managed CHICAGO, Nov. 10 /PRNewswire-FirstCall/ -- Aon
Consulting, the global human capital consulting organization of Aon
Corporation (NYSE:AOC), today announced results of its Retirement
Pulse Survey, conducted last month as a result of the economic
turmoil. This survey addresses both defined benefit and defined
contribution plans. (Logo:
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO) Aon
Consulting surveyed more than 125 U.S. organizations and found of
those that reviewed their pension plans, 16 percent determined the
economic turmoil will have a significant impact on plan funding and
expense, and 40 percent said it will have some impact. Meanwhile,
approximately one-quarter of respondents have not yet reviewed the
impact on their pension plans, but intend to do so. "Absent
significant changes in the FASB and IRS rules, we anticipate the
tumult will generate considerable changes in U.S. pension plans and
their investment strategies," said Cecil Hemingway, leader of the
U.S. Retirement Practice for Aon Consulting. "Approximately 40
percent of those surveyed noted they already have or plan to make
changes to their benefits, including the potential of freezing the
plan, the purchase of longer duration bonds, increasing the fixed
income allocations in their pension funds, annuitizing a portion of
their liabilities, or adding other investments, such as swap
overlays, to their pension fund in response to the mayhem on Wall
Street." Of those surveyed that either decided not to implement
changes to minimize pension risk, or had yet to research the
alternatives, 42 percent said they investigated possible changes
and decided against them; 30 percent have not yet investigated
changes, but intend to do so; and 28 percent had not yet
investigated changes and didn't expect to do so. "Now more than
ever, U.S. workers and their employers need to understand the tools
and resources available to address volatility and know their rights
and responsibilities," said Hemingway. "It's critical that
employers review their investments, make sure fiduciary concerns
are met and communicate appropriately to employees. More
importantly, we believe companies need to fully understand the
strategies they have undertaken and the risks inherent in them. In
many cases, they should consider implementing a new investment
philosophy that minimizes plan risk so it can withstand future
market and business fluctuations." As for defined contribution
plans (such as 401(k) and 403(b) plans), 54 percent of the plan
sponsors surveyed are communicating openly and continuously with
plan participants, while 53 percent are confirming their fiduciary
oversight and governance, as well as their commitment to monitor
investments as a result of the current economic turbulence.
However, at the same time, many organizations are suggesting
workers take active steps to ensure appropriate asset allocations,
such as considering professional investment advice (33 percent),
making professional investment advice available (33 percent) and
emphasizing the importance of asset allocation and diversification
(28 percent). In addition, 85 percent of those surveyed are
comfortable that their fund lineup offers the appropriate risk
return characteristics, while 11 percent are seeking
diversification information and 4 percent have not reviewed their
funds, but are relying on outside expert recommendations. "In
response to the financial turmoil and decreased asset values, many
plan sponsors support our belief that it is important to seek
independent professional advice to manage plan investments, control
the costs of those investments and control the risks borne by
participants," said Hemingway. "The results also confirm our belief
that communication is key and, at the employee's discretion, the
investment management of a participant account should be turned
over to professionals whose understanding of the financial markets
and the risk tolerance of an individual will increase the chances
of a secure retirement." About Aon Consulting Aon Consulting
Worldwide is among the top global human capital consulting firms,
with 2007 revenues of $1.352 billion and 6,335 professionals in 117
offices worldwide. Aon Consulting is shaping the workplace of the
future through benefits, talent management and rewards strategies
and solutions. Aon Consulting was named the best employee benefit
consulting firm by the readers of Business Insurance magazine in
2006, 2007 and 2008. For more information on Aon, please visit
http://www.aon.mediaroom.com/. About Aon Aon Corporation (NYSE:AOC)
is the leading global provider of risk management services,
insurance and reinsurance brokerage, and human capital consulting.
Through its 36,000 colleagues worldwide, Aon readily delivers
distinctive client value via innovative and effective risk
management and workforce productivity solutions. Our
industry-leading global resources, technical expertise and industry
knowledge are delivered locally through more than 500 offices in
more than 120 countries. Aon was named the world's best broker by
Euromoney magazine's 2008 Insurance Survey. In 2008, Aon ranked
highest on the Business Insurance ranking of the world's largest
insurance brokers based on commercial retail, wholesale,
reinsurance and personal lines brokerage revenues. Aon also was
ranked by A.M. Best as the number one insurance broker based on
brokerage revenues in 2007 and 2008, and was voted best insurance
intermediary, best reinsurance intermediary, and best employee
benefits consulting firm in 2007 and 2008 by the readers of
Business Insurance. Sign up to receive Aon news alerts by email or
RSS feed at: http://aon.mediaroom.com/index.php?s=58. Media
Contact: Joe Micucci 312-381-4786
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO
http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT:
Joe Micucci of Aon Corporation, +1-312-381-4786, Web site:
http://www.aon.com/
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