Aon Hewitt has launched a delegated management service for trust-based defined contribution schemes. A service set up to improve member outcomes through more effective and client-specific investments. BlackRock will provide Aon Hewitt with the needed platforms to execute the schemes.
Aon Hewitt, the global talent, retirement and health solutions business of Aon, has established the so-called 'Aon Delegated DC Services' for trust based defined contribution (DC) schemes. The new service will combine Aon’s DC and investment expertise for DC schemes with more effective investment and better member outcomes. “Creating better DC has been a key aim for us for some time. That means delivering a more effective investment approach, capable of greater speed of action, using best in class managers and better diversification – all with the ultimate aim of better outcomes for members,” says Andy Cox, Chief Executive of Aon Hewitt in EMEA.
The firm has successfully run fiduciary management for defined benefit schemes since 2010, and will use its expertise for the trust-based DC schemes. This new service will enable access to professionally constructed investment choices and offer diversification through a wide range of investment options, allowing trustees to focus on more strategic issues.
Trustees will have the option of accessing a wide range of Aon-designed target date funds or to use investment options that fit their own lifestyle design. They will have the opportunity to work with Aon Hewitt’s investment experts to develop their investment strategy, a strategy that Aon will then implement on their behalf. To match the ever-changing pensions landscape, Aon Hewitt’s service will offer continuous innovation to make sure its trustees are well-informed on market changes and its schemes adjustable to members’ needs. “Achieving the best possible member outcomes is always the fundamental aim of a pension scheme, whichever structure it adopts. But the nature of DC schemes is that a member’s individual pension pot at retirement is directly influenced by both the investment approach adopted and market movements at any one time. That brings the need for adopting the most efficient approach very clearly into focus,” comments Sophia Singleton, Partner at Aon Hewitt.
The new investment platform for the DC schemes is provided by BlackRock, an investment management corporation. This platform will allow DC scheme users to access the full range of Aon managed funds, including target date funds and customised solutions. BlackRock will also provide Aon Hewitt with an operational platform to deliver its services.