Aon Hewitt Shares Target Benefit Plan Expertise
TORONTO, June 21, 2012 /CNW/ - The economic turmoil of the last decade
has called into question the ability of traditional pension plans, both
defined benefit and defined contribution, to adequately deliver
sustainable retirement benefits.
Recognizing the need for more sustainable retirement solutions, Aon
Hewitt is releasing its guide, Target Benefit Plans: The Future of Sustainable Retirement Programs, which outlines the need for a new approach to retirement plans and
highlights its expertise in working with target benefit plans.
"Our guide on Target Benefit (TB) pension plans provides practical
insights to what many in the pension industry have been touting as the
future of retirement programs in Canada, by leveraging our extensive
experience in implementing such schemes. TB clearly provides plan
sponsors and plan members with another option to provide for a secure
retirement," said Karen Hall, Associate Partner, for Aon Hewitt, and
one of the guide's primary contributors.
What makes TB new and unique is that contribution levels are set
first—at a fixed level—and benefits are derived from what can be
afforded collectively by that contribution level, with the ability to
adjust benefits as experience develops. TB succeeds through the
adoption of a benefits/funding policy that prescribes in advance the
methods for varying benefits based on affordability, should such
adjustments be required, with pre-set reserve levels and a
pre-determined order of benefit adjustments.
"Target Benefit plans are fairly straightforward and leverage the best
aspects of DB and DC plans, while at the same time minimizing the key
disadvantages of each. A key feature of our guide is that it provides
several examples of sustainable pension plan designs from around the
world, while highlighting two perfect examples of major organizations
we work with in Canada that have adopted the TB approach," mentioned
Claude Lockhead, Chair, Canadian Investment Consulting Practice, for
Support for the TB approach is growing across the country, with several
provinces having already passed legislation allowing this new approach.
We expect other provinces to follow suit in the upcoming months.
"We actually have the tools in place—we just need to use them more
effectively and permit more flexibility in their application. TB has
great potential to achieve what we are all looking for: sustainable
retirement income," stated Barry Gros, Associate Partner at Aon Hewitt,
and one of the guide's primary contributors.
Click here to view guide summary
Click here to view full guide
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About Aon Hewitt
Aon Hewitt is the global leader in human resources solutions. The
company partners with organizations to solve their most complex
benefits, talent and related financial challenges, and improve business
performance. Aon Hewitt designs, implements, communicates, and
administers a wide range of human capital, retirement, investment
management, health care, compensation and talent management
strategies. With more than 29,000 professionals in 90 countries, Aon
Hewitt makes the world a better place to work for clients and their
employees. For more information on Aon Hewitt, please visit www.aonhewitt.com.
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and
technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives
manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.
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