Aon Hewitt to add DC to cross-border IORP
Aon Hewitt plans to offer defined contribution (DC) arrangements from its Belgium-based multi-employer IORP.
The consultancy group has contracted out DC administration and communication for the IORP, United Pensions, to Inadmin, a subsidiary of Dutch pension manager APG.
The cross-border scheme already implements defined benefit (DB) schemes for nine multinational companies, including European pensions plans of US pharmaceutical company AbbVie.
“We expect that the combination of DB and DC will further improve the quality of our proposition,” said Pascal Hogenboom, chief executive of Aon Hewitt Netherlands.
In a joint statement, Aon Hewitt and Inadmin said the administrator would initially service the Dutch market.
“However, as there is currently no provider that delivers DC services on a multi-jurisdictional basis in Europe, and because Inadmin has international aspirations, we don’t exclude a future extension of its sphere of activity,” said Paul Bonser, Aon’s head of international retirement in the UK.
According to Bonser, Aon Hewitt was in touch with dozens of companies that are considering outsourcing their DC plan, adding that Aon expected to acquire new clients from not only the Netherlands, but also from the UK, Ireland, Spain, and Italy.
He said Aon Hewitt was convinced that it could offer a large-scale investment strategy, with the consultancy acting as fiduciary manager. Currently, Aon Hewitt has $4.5trn (€4.2trn) of assets under advice worldwide.
Contracting out DC administration fitted into Aon Hewitt’s goal to offer “best-in-class” solutions, Bonser added.
“We are very impressed by Inadmin’s performance and therefore we see it as our perfect business partner,” he said.
Last year, Inadmin saw the number of participants it services double to more than 100,000, thanks to large clients joining, including asset manager Robeco, ABN Amro PPI, and income insurer Loyalis. Its pension assets under administration increased to more than €2bn.
Hogenboom said he expected that another five Dutch companies would join United Pensions with their DB plans, while Bonser said he expected many local firms to join, after they had seen the advantages of Aon Hewitt’s cross-border platform.
Current schemes in United Pensions comprise approximately €160m of pension assets, he said.
Bonser declined to elaborate about United Pensions’ exact growth target, but stressed that the vehicle was a long-term strategy.
“We see it as a very successful project and very attractive to multinationals. Therefore, we expect significant growth,” he said.