Management Consulting
Aon
Full Credential Description
Aon's 2022 Member Options Survey revealed that UK defined benefit (DB) pension schemes are increasingly leveraging Guaranteed Minimum Pension (GMP) equalisation as a strategic opportunity to enhance member support and retirement options. The survey, which included insights from over 300 UK DB schemes, indicated that one-third of these schemes are using the GMP equalisation process to improve the retirement experience for their members. This trend reflects a growing recognition among trustees of the efficiencies gained by integrating GMP equalisation with a review of member options and support. The tailored solutions provided by Aon include the introduction of online modellers and access to independent financial advisers (IFAs) for members, which facilitate informed retirement decisions. Notably, 32% of the surveyed schemes are planning to offer additional support through these channels. A significant portion of schemes (67%) that provide IFA support cover the costs entirely, ensuring that members receive quality advice without financial barriers. This approach not only enhances member engagement but also aligns with best practices recommended by the Pensions Ombudsman regarding regular reviews of appointed IFAs. The survey also highlighted a proactive trend among schemes to conduct bulk member options exercises as part of their long-term strategies, with 56% of schemes either having completed or planning to initiate such exercises. These initiatives are designed to communicate options to members before any irrevocable changes occur, particularly in the context of potential insurance transactions. This strategic communication not only aims to reduce pension scheme risk but also enhances member flexibility and choice. Furthermore, the survey identified emerging trends in addressing Inclusion and Diversity (I&D) and Environmental, Social, and Governance (ESG) considerations within member communication strategies. While only 27% of schemes are currently considering I&D impacts, there is an expectation for growth in this area, particularly in light of regulatory pressures. Similarly, only 30% of schemes have begun to incorporate ESG factors into their member communications, indicating a significant opportunity for improvement in aligning pension scheme practices with contemporary social and environmental expectations.