The environment in which pension plan sponsors operate is changing at a pace never seen before. Stock and bond analysts are digging below the surface of pension plan management and assessing organisations based on the financial risks that exist in their pension plan – favouring those companies demonstrating strategic risk management and maximising the rewards associated; and penalising those that don’t.

We are now seeing risk become a board level agenda item for many companies. This has been accentuated by the recent credit crunch, highlighting poor risk management by some of the world's most sophisticated financial institutions.

Risk is central to Aon’s ongoing consulting capabilities. Our consultants offer an end to end solution to risk management - from consulting on your strategic objectives to implementation of risk management solutions which will form part of your strategic game-plan for pensions and other risks. These solutions include looking at both assets and liabilities – derivative based solutions that lead to risk efficient investment strategies, as well as looking at liability management techniques.

No single solution . . .

Each company will have its own unique requirements and objectives when considering the risks they take on – there is no "one size fits all" solution for risk management, and it is much more than just "risk reduction". In the context of pension plans, does reducing your risk simply increase the cost of your pensions? We work with our clients to consider both the risk and return aspects of pension scheme financing. At Aon, we take an individually tailored approach to understanding a client’s needs - helping them to explore their current levels of risk, determining whether this is acceptable, and designing innovative solutions which both adjust the risk to the preferred level, and optimise reward potential from these risks.

A more integrated approach . . .

Recognising these differences in drivers and objectives is key to designing solutions to suit each of our clients. We offer organisations the expertise, objectivity and tools to help them through a risk and reward framework:


• Identifying an organisation’s objectives and then identifying the risks that may prevent them from meeting those objectives.
• Quantifying those risks and the rewards you expect to receive for taking them.
• Acting to strategically retain, reduce, remove or raise each component of risk based on an organisation’s risk tolerance.
• Reassessing the results of the actions and how the organisation’s risks and objectives change over time.

For more information please email us.