Aon Pooled Employer Plan Reaches $2 Billion in U.S. Plan Assets and Commitments

Rhea-AI Summary

Aon plc (AON) has announced that its Pooled Employer Plan (Aon PEP) has reached $2 billion in 401(k) assets under administration and commitments since its inception in 2021 and has doubled during the last year. The Aon PEP is the industry leader with more than 70 employers providing 401(k) benefits to over 50,000 employees, representing a diverse mix of industries. Participants are benefiting from a higher performing, more efficient 401(k) program, with employees able to accumulate up to 11 percent more retirement savings during their career due to lower fees. Aon PEP costs are less than half of those paid in traditional 401(k)s, and it reduces staff time and resources dedicated to plan management, compliance, and governance. The transition to the Aon PEP has helped companies provide a more efficient, compliant, and beneficial 401(k) plan for employees, improving their retirement savings experience.

Positive

• The Aon PEP has reached $2 billion in 401(k) assets under administration and commitments, doubling during the last year.
• The Aon PEP is the industry leader with over 70 employers providing 401(k) benefits to over 50,000 employees, representing a diverse mix of industries.
• Participants can accumulate up to 11 percent more retirement savings during their career due to lower fees in the Aon PEP.
• Aon PEP costs are less than half of those paid in traditional 401(k)s, and it reduces staff time and resources dedicated to plan management, compliance, and governance.
• The transition to the Aon PEP has helped companies provide a more efficient, compliant, and beneficial 401(k) plan for employees, improving their retirement savings experience.

Negative

• None.

CHICAGO, Nov. 28, 2023 /PRNewswire/ -- Aon plc (NYSE: AON) has announced that its Pooled Employer Plan (Aon PEP) has reached $2 billion in 401(k) assets under administration and commitments since its inception in 2021 and has doubled during the last year.

Today, the Aon PEP is the industry leader with more than 70 employers providing 401(k) benefits to over 50,000 employees, helping those employers shape better retirement decisions.

Aon, a leading global professional services firm, reports that participating employers reflect a diverse mix of industries, including biotech and life sciences, manufacturing, services, consumer products, energy, technology, and transportation. Large brand name organizations also are utilizing the Aon PEP for merger and acquisition activities and other corporate transactions.

"Participants are benefiting from a higher performing, more efficient 401(k) program, with employees able to accumulate up to 11 percent more retirement savings during their career due to lower fees,*" said Rick Jones, senior partner in Aon's Wealth Solutions. "The advantages of switching to a pooled employer plan – potentially half the cost, reduced time commitment from corporate staff, improved governance and high-quality retirement planning options – have become substantial for employers and their employees. We expect more than half of U.S. employers to merge their traditional 401(k)s into pooled employer plans by 2030."

Within the Aon PEP, 'all-in' participant fees can be less than half of those paid in traditional 401(k)s according to data from BrightScope and current Aon PEP costs. The combined scale in PEPs help lower plan costs, including record-keeping and investment management fees. Beneficiaries also have easier access to investment tools and education services to better prepare for retirement.

From the employer perspective, pooled employer plans reduce staff time and resources dedicated to plan management, compliance and governance. PEPs may also potentially reduce fiduciary risks for employers and provide high-quality retirement planning for beneficiaries.

"Moving to a pooled employer plan is the future of 401(k) benefits," said Rick Harman, vice president of total rewards and HR operations for ID.me. "Transition to the Aon PEP has helped our company provide a 401(k) plan that is more efficient, compliant and beneficial for employees, who now better understand their investments and are having a better experience saving for retirement."

"The Aon PEP offers the chance to advance retirement security for workers and build a more resilient workforce across the U.S.," said Byron Beebe, senior partner in Aon's Wealth Solutions. "It provides efficiency and scale while maintaining individual employer autonomy to define matching and other contribution levels, vesting rules and other key plan design features."

To read more information about the Aon PEP, click here.

*The performance modeling shows a hypothetical employee participating in the Aon PEP would save $1,347,000 throughout their career compared to $1,210,000 for a worker in a traditional 401(k) with higher fees. It assumes a 25-year-old employee with $50,000 starting salary, $3,000 starting account balance, 4 percent annual pay increases, age 67 retirement, 3 percent initial savings rate with auto-escalation to 10 percent, invested in a diversified S&P through target date fund, and employer matching 100 percent on first 3 percent and 50 percent on next 2 percent. Income improvement in the Aon PEP assumes a 25 basis points reduction in participant fees and the same modeling parameters.

About Aon

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business. 

Follow Aon on Twitter and LinkedIn. Stay up-to-date by visiting the Aon Newsroom and sign up for News Alerts here.

Media Contact
Robert Elfinger
robert.elfinger@aon.com 
+1 312 381 0071

 

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SOURCE Aon plc

FAQ

What is the latest announcement from Aon plc (AON)?

Aon plc (AON) announced that its Pooled Employer Plan (Aon PEP) has reached $2 billion in 401(k) assets under administration and commitments since its inception in 2021 and has doubled during the last year.

How many employers are currently providing 401(k) benefits through the Aon PEP?

More than 70 employers are providing 401(k) benefits to over 50,000 employees through the Aon PEP.

What are the benefits of the Aon PEP for participants?

Participants can accumulate up to 11 percent more retirement savings during their career due to lower fees in the Aon PEP.

How do the costs of Aon PEP compare to traditional 401(k)s?

Aon PEP costs are less than half of those paid in traditional 401(k)s.

How does the Aon PEP impact companies' management of 401(k) plans?

The Aon PEP reduces staff time and resources dedicated to plan management, compliance, and governance for companies.

What has the transition to the Aon PEP helped companies achieve?

The transition to the Aon PEP has helped companies provide a more efficient, compliant, and beneficial 401(k) plan for employees, improving their retirement savings experience.