Aon HewittRisk Settlement Group

Risk. Reinsurance. Human Resources.

Bulk Annuity CompassThe complete solution for bulk annuities

About Aon HewittAon Hewitt empowers organisations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organisational and personal performance and growth, navigate risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is a global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit: aonhewitt.com

Introducing Bulk Annuity Compass

Aon Hewitt’s online bulk annuity broking platform, Bulk Annuity Compass, has been developed based on our extensive experience of the bulk annuity market to help you avoid missed opportunities and to make sure you are positioned to get the best possible pricing. It combines Aon Hewitt’s technological capabilities with our insights and knowledge of providers, which means that we will approach the market at the right time and in the right way to get the best possible outcome for your scheme.

The current bulk annuity market of £10Bn – £15Bn each year is dwarved in the context of over £2,000Bn of UK pension scheme liabilities. Even though market capacity is likely to increase over time, we are already seeing insurers becoming more selective about the schemes they will quote for and give the best terms to.

Schemes on the Bulk Annuity Compass platform will be in a stronger position to take advantage of market opportunities in this environment.

Level 1

Level 2

Level 3

Daily online tracking for your scheme, allowing you to decide the right time to transact

A streamlined, yet personalised approach to broking. Our bespoke positioning of your scheme and interactive online platform deliver the optimal blend of efficiency and insurer engagement

Access to greater certainty and faster implementation, through:1. Price-lock against specific assets or

indices, reducing the risk of adverse market movements

2. Comprehensive due diligence of financial and administrative capabilities

3. Opportunity to utilise pre-agreed enhanced contracts

If pricing is not quite right, Aon’s trigger-based online platform allows a two-way information flow with insurers — allowing them to bid for your scheme until your desired price is achieved

Monitor

Engage

Trigger Transact

Bulk Annuity Compass schemes benefit from maximum insurer engagement. Only schemes with a realistic chance of transacting will progress to the next level and onto the online Bulk Annuity Compass broking platform. This means that insurers recognise that we are not wasting their time, and you do not waste time and money at a point where a transaction is not realistic.

Bulk Annuity Compass has been endorsed by insurers, and benefits from a unique combination of innovative solutions, including:

• A guided decision-making and monitoring process based on insurer pricing so you approach the market at the point where there is a strong chance of transacting

• Fewer missed opportunities via Aon’s online Bulk Annuity Compass broking platform, delivering greater governance and allowing you to secure the highly competitive commercial terms

• Greater certainty during transaction as a result of price certainty, comprehensive due diligence and pre-negotiated legal annuity contracts

Preparing the wayPlanning is key. We will make sure that you fully understand the implications of a bulk annuity, including the impact on:

• Funding

• Residual investment strategy

• Company accounting

We will also identify any preparatory work that needs to be undertaken in relation to the scheme's data and/or benefits, and help you set up appropriate governance processes.

Supporting your journeyA bulk annuity transaction requires careful planning and attention to detail in the execution.

We understand that trustees and sponsors need clarity, in particular when they will need to make decisions and what advice they will receive to help them make those decisions.

With clear decision and break points after each stage, you will have confidence that key milestones will be met and you are committed only until the end of each stage, should you decide not to proceed further.

Project management is also critical, and we have tried and tested processes and project plans that ensure that all parties know what they need to deliver by when.

Monitor

Aon’s Risk Analyzer allows you to track online pricing in the market on a daily basis to give you a bulk annuity cost, tailored to your scheme’s benefits. It does this by using:

• Pricing feeds from across the insurance market; and

• Aon’s unique experience of over £10Bn of risk settlement transaction in each of the past three years.

This cost-effective approach means you can make an informed decision on when the time is right to engage actively with the market.

Level 1

Central insurance price Trustee target

£1,750m

£1,800m

£1,850m

£1,900m

£1,950m

£2,000m

£2,050m

£2,100m

£2,150m

01 Jan2016

01 Feb2016

01 Mar2016

01 Apr2016

01 May2016

01 June2016

01 July2016

Through the Bulk Annuity Compass broking platform you will approach the market at the optimal time for you. That is, close enough to your target price that you will receive enhanced insurer engagement, while making sure that you do not miss opportunities.

Aon is the largest insurance broker in the world and the strong relationships we have at senior level with all insurers give us valuable insight, which informs our personalised positioning of Bulk Annuity Compass schemes. This is complemented by our highly robust and streamlined online auction process, which makes sure that the correct benefits are secured and the best terms obtained as efficiently as possible.

The platform facilitates interactive and secure engagement with insurers in the market. Comprehensive details of the scheme benefits and membership are held on the platform, which allows insurers to provide fully transactable and competitive pricing for your scheme.

EngageLevel 2

Benefitspec. Data

Insurerqueries Quotation

Request for

quotation

Member data

Benefit specification

Query log

Client specific quotation

requirements

Submit quotation

Bulk Annuity Compass

Where a trigger-based approach is used, Aon Bulk Annuity Compass allows a two-way transfer of information with insurers — this means that you will know as soon as your target price has been reached, and with much greater certainty.

As you enter the critical transaction phase, you will have access to:

Price lock

Clarity over price movements during implementation and greater certainty in volatile markets.

Due diligence

Covering insurers' financial strength and administrative capabilities, this is uniquely provided by Aon Hewitt as part of our standard service, utilising input from independent specialists (AKG, Cazalet Consulting, Agile Consulting).

Pre-agreed Pathway legal contracts

Cutting transaction time down to a matter of days and allowing comparison of terms ahead of provider selection — developed in conjunction with Eversheds LLP.

Trustees

Ability to provide live pricing updates for your scheme

Confidence that opportunities will not be missed

Online platform allowing two way information sharing, delivering greater visibility, governance and control while

helping secure the highly competitive terms

Bespoke positioning of your scheme

Trigger/TransactLevel 3

Aon Insurers

Bulk Annuity

Compass platform

“Aon’s Bulk Annuity Compass gives you greater certainty than ever before to capitalise

at the right time and on the right terms to maximise the value for your scheme”

Further information and contacts

For more information on Bulk Annuity Compass, or Aon Hewitt’s wider risk settlement capabilities and offerings, please visit:

aonhewitt.co.uk/risksettlement

Alternatively please contact your usual Aon Hewitt contact, or:

John Baines+44 (0)121 262 6944 john.baines@aonhewitt.com

Paul Belok+44 (0)20 7086 8089paul.belok@aonhewitt.com

Martin Bird+44 (0)20 7086 9027martin.bird@aonhewitt.com

Dominic Grimley+44 (0)121 262 5094dominic.grimley@aonhewitt.com

Michael Walker+44 (0)1372 733027michael.walker.3@aonhewitt.com

Aon Hewitt empowers organisations and individuals to

secure a better future through innovative talent, retirement

and health solutions. We advise, design and execute a wide

range of solutions that enable clients to cultivate talent to

drive organisational and personal performance and growth,

navigate risk while providing new levels of financial security,

and redefine health solutions for greater choice, affordability

and wellness. Aon Hewitt is a global leader in human resource

solutions, with over 30,000 professionals in 90 countries

serving more than 20,000 clients worldwide. For more

information on Aon Hewitt, please visit: aonhewitt.com

Follow Aon Hewitt on Twitter: @AonHewittUK

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About Aon Hewitt

About Aon Aon plc (NYSE:AON) is a leading global provider of

risk management, insurance brokerage and reinsur-

ance brokerage, and human resources solutions and

outsourcing services. Through its more than 72,000

colleagues worldwide, Aon unites to empower results

for clients in over 120 countries via innovative risk

and people solutions. For further information on our

capabilities and to learn how we empower results for

clients, please visit: http://aon.mediaroom.com/

© Aon plc 2016. All rights reserved.The information contained herein and the statements expressed are of

a general nature and are not intended to address the circumstances of

any particular individual or entity. Although we endeavor to provide

accurate and timely information and use sources we consider reliable,

there can be no guarantee that such information is accurate as of the

date it is received or that it will continue to be accurate in the future.

No one should act on such information without appropriate profes-

sional advice after a thorough examination of the particular situation.

Copyright © 2016 Aon Hewitt Limited. All rights reserved.

Aon Hewitt Limited is authorised and regulated by the Financial

Conduct Authority. Registered in England & Wales. Registered No:

4396810.

Registered Office: The Aon Centre, The Leadenhall Building, 122

Leadenhall Street, London, EC3V 4AN.

Follow us on twitter @aonhewittuk

www.aon.com

Risk. Reinsurance. Human Resources.