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Aon International Retirement Monthly Newsletter – September 2021

This month’s newsletter is packed with interesting articles, papers and webinars. Highlights include the results of our global DC study comparing different approaches taken by employers, an update of what has been happening in the risk settlement market in US and UK and developments in the retirement landscape in Australia and India. There is also focus on IAS19 accounting covering the results of our global survey of accounting assumptions and a paper covering the decision on attribution including which countries are affected and how this impacts sponsors.

The focus of our next session in the International Retirement Webinar series will be Germany on 6 October where we will discuss a range of topics covering the retirement landscape. In previous months we have focussed on the Netherlands, Brazil and South Korea. Click here to register and click here to watch previous webinars

If you have any feedback or if there if something you'd like to hear more of then please let us know.

From Colin Haines, Partner, International Retirement & Investment



Aon’s 2021 Global Defined Contribution (DC) Retirement Study
Globally, total retirement savings have now exceeded USD $50 trillion. The OECD reports that most of these assets are now in Defined Contribution (DC) savings and this is only going to increase. In this survey Aon asked employers across the world about their approach to delivering DC savings to employees in a series of detailed local market surveys. The results can be found here.

Aon's Global Survey of Retirement Plan Accounting Assumptions
This report presents the results of Aon’s global survey of accounting assumptions used for employee benefit plans at 2020 year-end. The results of this survey may be useful to companies when setting preliminary assumptions for 2021 year-end and budgets for 2022. See the results here.

IAS 19 Attribution Decision
The International Financial Reporting Interpretations Committee (IFRIC) recently finalised a decision on how IAS 19 applies to certain plans where benefits are not payable until an individual reaches a specified age and a specified number of years of service. For some clients, the IFRIC decision may require a change in attribution approach. This report from Aon’s Global Accounting Committee provides a brief overview of the issue and the types of plans in various countries that may be impacted.

Equity Indexation - ESG and Climate Aware opportunities
There is a wide range of opportunities to align Responsible Investment beliefs with portfolios. This paper focuses on options to shift existing passive equity portfolios to index tracking strategies more aligned with evolving responsible investment views. Read more here.

United Kingdom

Risk Settlement Bulletin – Q3 2021
This bulletin delves into the story of the bulk annuity market so far in 2021, explores the latest pricing trends and investigates longevity swaps as an alternative option for schemes. Access the bulletin here.

Aon Member Options Digital Conference – 21 September 2021
The conference will link three distinct areas with the common theme – what have recent experiences taught us to improve things for pension schemes and their members in future? This includes learning from the experiences of pensioners who have retired in the post freedom world, the GMP conversion and PIE ‘early movers’ and the developments in the DB world to improve outcomes for DC members. Sign up here.

More content:

EMEA (excl. UK)

Germany: Intergenerational justice in the bAV - Urgent need for action for fairer pensions
Employees across all age groups and employers perceive injustices in both statutory and occupational pension schemes (bAV). There is becoming an urgent need for action in companies, especially since new pension regulations for the bAV have often been at the expense of the younger generation. Read this Aon study to learn more.

Here are some pieces you may have missed last month:
  • Ireland: IORP II is finally here…! – April Flash Report
  • South Africa: Two important things to know if you are late to the retirement saving game
  • Netherlands: New Pension Law


Australia: Superannuation Fund Performance Regulation Commences
The Australian Regulator (APRA) is completed its first superannuation fund performance test and the resultant list of the best- and worst-performing super funds is now public. A total of 76 default MySuper investment options have been graded as either "pass" or "fail" — based on a regulatory test of comparison of fees versus performance over seven years. Of particular note is that 13 funds were shown to have failed the performance test. These include Colonial First State FirstChoice Superannuation Trust, BT Super's Retirement Wrap, ASGARD, and others. The implications of this are that super funds that fail must notify their members, and if they fail two years running, they are unable to accept new members. As such, employers are recommended to undertake a governance review of their super arrangements to ensure they are providing adequate performance and also that employers are prepared to be operationally payroll compliant in the new super ‘stapling’ regime which comes into effect from 1 November 2021.

Reach out to Aon’s APAC team should you like to discuss this or for support at apac.retirement@aon.com

India: India’s National Pension Program Gains Acceptance, but Hurdles Remain
Companies in India are increasingly offering employees the option to save for retirement through the government-run National Pension System (NPS). Aon’s Vishal Grover and other retirement planning experts discuss how more work needs to be done to encourage employees to pursue this option. Access the article here.

More content:
Here are some pieces you may have missed last month:

  • Australia: Change is Coming to Australia’s Retirement Contribution Scheme; Here’s What Employers Should Know
  • Japan: Employer Retirement Risk Implications of Reduction to Investment Product Returns
Stay updated

United States & Canada

Mid-Year Update | U.S. Pension Risk Transfer Market
The mid-year update provides pension risk transfer transaction information and pricing themes for the first half of 2021. It also highlights what to expect for the remainder of the year for premiums, demand from insurers, and assets-in-kind. Read more here.

Enhanced LDI
Traditional LDI investments are concentrated in areas that are expensive (long government and credit), without perfectly hedging liability risks, creating opportunities for improvement. In this paper Aon discusses how using Enhanced LDI, or eLDI, to diversify pure government/credit liability-hedging portfolios may improve results. Access the paper here.

More content:


International Retirement Webinar Series
Join Aon's International Retirement & Investment team to hear insights on local market developments around the world. Each webinar will help those responsible for governing, managing and overseeing retirement plans to understand new local retirement topics and key changes in local legislation. Most recent webinars have included Netherlands, South Korea and Brazil and on 6 October 2021 the focus will be Germany. Click here to register and click here to watch previous webinars


You or your colleagues may be interested in accessing these recent webinars:

  1. Global: Vaccines, volatility and value – charting the course for 2021.This webinar is designed to support companies in this very complex environment as they set strategies for the year(s) ahead.
  2. US: Q1 Market Update - R&I Investment Series Kick-off - Investing in 2021: The Real Risk/Reward Challenge
  3. US: Pooled Employer Plans, SECURE 2.0, and the Future of Retirement Security.
  4. UK: The Decline of Women's Labour Market Participation During COVID-19: A Systemic Risk
  5. UK: Virtual DC Live Week: Keeping on track in challenging times
  6. UK: 2021 Risk Settlement Conference Replays
  7. UK: Helping smaller schemes succeed in a busy market place
  8. Canada: Canadian Pension Risk Strategies

For additional information and other international retirement queries, please contact us.

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