To support the movement of researchers within the European Economic Area, the European Commission is in the process of setting up a single EU wide pension scheme. After a lengthy development process, supported by Aon Hewitt, the firm has recently been announced as the schemes technical advisor for the initial rollout of the scheme to the first nine countries over the coming four years.
The European Commission (EC), the body set up to oversee the daily running of the EU, is creating a single European pension arrangement to improve the mobility of researchers within the European Research Area (EEA), in part because the free movement of researchers is seen as a driver for excellence. As it stands, researchers face considerable constraints in preserving their supplementary pension benefits when they decide to move into cross boarder opportunities.
In a forward looking move to overcome these issues, the EC has come to the aid of a consortium of employers, through Horizon 2020, by helping to creating a single Retirement Savings Vehicle for European Research Institutions (RESAVER), which will set up contribution plans, suited for research organisations. The new scheme will create a savings product that allows mobile and non-mobile employees to remain affiliated with the same pension scheme when taking up the new opportunities while creating savings with lower asset management chargers and better access to quality investment.
Aon Hewitt already has a strong track record with the programme, being involved in the 2009 feasibility study of the proposed framework commissioned by the EC. After a various workshops and engagements with stakeholders in 2013 a group of representatives set up a “Task Force for the establishment of a pan-European retirement savings vehicle (RSV) for Research Professionals” for which Aon Hewitt was charged with providing a report on the six meetings held by the taskforce.
Recently it was announced that EC and the RESAVER consortium have appointed the same HR consultancy to provide full technical support for creating the pan-European defined contribution (DC) pension fund for researchers. The firm’s role will be to guide the end-to-end selection process, which includes the selection of investment managers, annuity providers, custodians, reinsurance providers, as well as administration providers and insurance providers to provide pension (2nd pillar and 3rd pillar) and risk benefits. In addition, Aon Hewitt will develop and implement a communications strategy to maximise participation in RESAVER.
The programme starts with the roll out of a cross-border DC IORP that, over the next four years, will open to organisations in at least nine different countries. With the countries to be selected dependent on the relative demand – all public and private research institutions in selected countries will be able to take part in the programme.
Paul Bonser, partner and leader of Aon Hewitt's UK International Retirement Practice, comments: “This is a landmark assignment for Aon Hewitt which will change the way pensions are provided in Europe and will change organisations’ views on what is possible across borders and across companies. We expect this trend to gather pace, extending the geographical coverage of cross-border pension funds and enabling the coverage of smaller groups of employees on a cost-effective basis.”