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Aon Retirement and Investment Blog

Aon Hewitt Investment-Related White Papers

Following are many of the major white papers we have written recently, including short descriptions and links to the full paper. Papers of specific regional interest are labeled as follows: Global, U.S., Canada, and U.K. If you wish to discuss any of these pieces, please feel free to contact the authors (contact info is typically found on the last page of each paper), your Aon Hewitt consultant, or retirementandinvestmentblog@aonhewitt.com.
Final Fiduciary Regulations – Overview for Plan Sponsors – The U.S. Department of Labor (“DOL”) issued the final regulations defining what it means to be an investment advice fiduciary. The final rules expand the scope of who may be considered investment advice fiduciaries under ERISA and the Internal Revenue Code and require that such advisers act in the best interest of those who are the beneficial owners of the plans and IRAs. (May 2016, U.S.)
Pension Funding Strategy - Recent regulatory changes created conflicting factors that have prompted many plan sponsors to review their approach to pension plan funding. In an effort to assist plan sponsors with such reviews, Aon Hewitt has published this report for prefunding an underfunded pension plan. (March 2016, U.S.)
Raising Your Corpus from the Dead - This research focuses on spending policy development and return enhancing opportunities to better position not-for-profits for corpus growth while maintaining purchasing power. (February 2016, U.S.)
How 403(b) Plans are Wasting Nearly $10 Billion Annually, and What Can Be Done to Fix It – This research brings to light the history and evolution of 403(b) plans and what still needs to be done to improve participant outcomes by reducing participant borne costs and moving the option structure to reflect best practices for DC plans. (January 2016, U.S.)
Past and Future of Retirement - Do retirement age assumptions used in actuarial valuations reflect true best estimates? Are there workforce planning issues stemming from demographic shifts, economics, and later retirement ages? Aon Hewitt recently completed research focusing on how to help employers understand and resolve these issues. (January 2016, U.S.)
The Small Cap Alpha Myth - Revisited - This research challenges the common belief that U.S. small cap equity is a particularly attractive space for active management, offering investors increased likelihood of outperformance compared to other areas of the market. (January 2016, U.S.)
Investing in Private Equity Funds of Funds versus the Public Markets - This paper addresses the question of whether it benefits institutional investors to invest in private equity fund of funds versus public markets. (December 2015, Global)
Risk Parity – Looking at Risk Through a Different Lens - Risk parity is an investment approach that seeks to achieve a balanced allocation of portfolio risk across assets rather than on the allocation of capital. This paper examines the case for risk parity strategies and concludes that while certain risks are present, consideration should be given to exploring the potential benefits, which may include reduced dependence on equity market sensitivities, portfolio diversification, exposure to leveraged credit and interest rates, and access to talented managers. (December 2015, Global)
Real Estate Beta:  Understanding the Power of Core - This paper offers guidance on what real estate is, provides an overview of the unique characteristics of the asset class, outlines the benefits of the inclusion of core real estate, and demonstrates the potential impact going forward if included in a multi-asset class portfolio today. (December 2015, Global)
The Bipartisan Budget Act of 2015: Strategic Implications for Pension Plan Sponsors - This new white paper provides an overview of BBA 2015’s key provisions affecting private sector pension plans and strategic implications for pension plan funding, investment, and settlement strategies. (December 2015, U.S.)
The Real Deal: 2015 Retirement Income Adequacy at Large Companies - Aon Hewitt’s sixth installment of The Real Deal Study analyzes the financial retirement readiness of 2.1 million employees of 77 large U.S. employers. (October 2015, U.S.)
Redefining Retirement in the Health Care Industry – This research is a five-part series (Part 1, Part 2, Part 3, Part 4, Part 5) focused on challenges for health care organizations. The Affordable Health Care Act introduced significant financial challenges for virtually all health care organizations in the U.S., especially hospitals. As multiple hospitals and related service providers band together, they are faced with the challenge of choosing the “right” retirement program for the new organization. This series is designed to provide insight and strategy for health care organizations in the midst of such dramatic change. (December 2015, U.S.)
Multi-Asset Credit – This research highlights the potential benefits to investing with a broader scope within credit versus a traditional core credit strategy including shorter duration, reduced volatility, better returns, and simplified governance. (November 2015, Global)
Flexibility in a Rigid Market - This paper addresses how investors may be able to improve on market cap-weighted benchmarks in fixed income. (October 2015, U.S.)
10 Insights on Rules-Based and Factor Investing - There are many varieties of rules-based, or “smart beta,” strategies. In this article, we focus on the equity strategies that are currently the most commonly used among institutional investors: fundamental and low volatility. (August 2015, Global)
Customize DC Investments for Participant Success – This research provides plan sponsors with an action plan to improve participant outcomes through re-enrollment and the implementation of a custom investment lineup. (July 2015, U.S.)
Back to the Future: How the Future of Pension Risk Management Will Differ from the Past – This research introduces the actions that plan sponsors should consider when evaluating and improving their strategies in light of the changing market environment. (June 2015, Global)
Reinsurance Investing – This research highlights the potential benefits to investing in insurance linked securities and fits within the investment theme of “Intelligent Diversification.” (June 2015, Global)
Why Consider Using an LDI Overlay? - This paper describes what a LDI overlay is and how it can improve the flexibility, efficiency and accuracy of an LDI solution. (April 2015, Canada)
Diversification – What’s in the toolbox? - As we continue to anticipate more difficult return environments, there are a number of other, useful and readily accessible tools on the shelf today that are made available to smaller institutional investors. (March 2015, Canada)
2014 Lump-Sum Windows - This paper shares Aon Hewitt’s experience on terminated vested lump-sum windows implemented in 2014 and lays out best practices for plan sponsors looking to implement future lump-sum windows. (March, 2015, U.S.)
Looking Beyond Banks for Financing: European Mid-Market Direct Lending Opportunity - As banks’ abilities to lend has been hindered by new regulations, the increased presence of non-bank lenders has created many compelling opportunities for institutional investors. Direct lending funds, which provide financing to European mid-sized businesses, offer investors a way to enhance returns by capitalizing on this opportunity. (2015, Global)
Asset Allocation through Changing Market Environments – This paper collects research on an important theme; while it is impossible to perfectly predict what markets will do, there is strong evidence that markets in some environments are more conducive to expected returns than others. Investors may improve their risk and reward profiles by identifying these market environments and rotating assets accordingly. (January 2015, Global)
Hot Topics in Retirement 2015 - This report presents the results of an annual survey of Aon Hewitt’s retirement clients and discusses various trends in the industry. Inspired by Innovation: The Actions Early Adopters are taking in their DC Plans further emphasizes and contextualizes results from a subgroup of the survey set. (January 2015, U.S.)
Thought leadership materials prior to 2015 can be found here.

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