Deferred members of the Aon Minet Pension Scheme were offered an enhanced transfer value for a limited period and were provided with paid-for independent financial advice to support their decisions.
This exercise was another action carried out by Aon plc as a key part of its longer-term de-risking objective for its UK defined benefit schemes. This activity followed three buy-in transactions for Aon-sponsored pension schemes completed in the past five years for around £1.2 billion.
To continue the success of the bulk transfer exercise in to the future, the Aon Minet Pension Scheme will now - as standard - be offering retiring members the option to transfer their benefits out of the scheme. In doing this, members will be provided with financial education and support through use of the Aon Retirement Options Model (AROM), a web-based tool which can assist scheme members in identifying the best choice for themselves. In addition, members will be provided with independent financial advice to support their decisions.
Steve Gilbert, chair of Trustees of the Aon Minet Pension Scheme, said: “The close collaboration between the company, trustees and their advisers was vital in the overall success of the project and in designing an offer that would meet the objective of all stakeholders. The trustees now have a smaller scheme to manage with reduced pension risk. Working collaboratively with all parties was vital to this agreement and we have achieved a successful outcome for everyone involved.”
Jamil Merali, senior consultant and Member Options specialist at Aon Hewitt, said: “This is a great example of making use of our joined up Liability Settlement framework which brings Risk-Settlement and Liability Management under one umbrella to deliver against a de-risking objective set by the company and trustees. We are delighted with the outcome and being able to complete this ETV exercise soon after the recent buy-in transactions.
“For the bulk exercises, deferred members, most notably, were given a new option and were able to make an informed decision about their options on the bulk exercise. Making use of the Aon Retirement Options Model will help future retirees to make the best choice to suit their needs.”
Jamil Merali added: “Pensions Freedom has created the opportunity to provide members with more options about their retirement income while also allowing sponsors to achieve their objective of reducing pension risk and getting closer to a buyout position. In this case, we created an offer which was both attractive to members and has allowed the scheme to become substantially closer towards full buyout.”
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