2012 Hot Topics in Retirement - Aon

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Likely Actions on Investment Fund O�erings in 2012 Completed Recently/ Not Needed Actions Related to Funds 40% 38% 33% 33% 31% 30% 27% 25% 24% 9% (n ranges from 328 to 366) 28 Aon Hewitt Perform a comprehensive review of fund o�erings Update investment policy statement Review defined contribution fund operations, including fund expenses and revenue sharing Change/alter fund options to reduce costs of funds Implement a self-directed brokerage window Add a money market fund Change some or all funds from actively managed to index funds Add a tier of index options Add funds designed for inflation protection Remove stable value fund Likely to O�er in 2012 (Among Those Plans That Do Not Currently O�er) Very Likely 59% 31% 61% 18% 3% 2% 5% 4% 3% 1% Somewhat Likely 26% 33% 28% 32% 5% 5% 16% 14% 18% 4% Somewhat Unlikely 9% 20% 7% 34% 20% 24% 35% 38% 37% 21% Very Unlikely 7% 16% 5% 17% 73% 69% 44% 44% 42% 73%
Communication Initiatives Many employers use communication initiatives to educate and influence behavior in the defined contribution plans. Among the more popular undertakings that employers are focusing on in 2012 are a general understanding and appreciation of the plan, plan participation, and contribution levels, as well as retirement income adequacy. Likely Defined Contribution Communication Initiatives in 2012 Initiatives General understanding and appreciation of plan Plan and/or fund expenses Plan participation Participant contribution levels Diversification/fund usage Retirement income adequacy Availability of resources to help with retirement planning Retirement income estimates and retirement process Defined contribution decision making within a broader financial or total benefits context Broader financial education Encourage new hires to roll 401(k) from previous employer into your plan Rolling over versus cashing out of plan Loan-taking or in-service withdrawals (n ranges from 362 to 369) Of course, fees (plan and/or fund expenses) are also a focus for the coming year with nearly half of sponsors listing this as a likely communication initiative, compared with only 39% of sponsors in 2011. This is at least partly attributable to regulatory requirements. Availability of resources that participants can access is also a large focus for 2012 (78%), as many sponsors have enhanced their plans in recent years. Very Likely 56% 49% 44% 41% 40% 40% 40% 28% 27% 20% 14% 13% 10% Somewhat Likely 33% 31% 36% 37% 40% 40% 38% 39% 42% 33% 25% 35% 25% Somewhat Unlikely 9% 15% 15% 17% 17% 16% 16% 26% 23% 33% 41% 38% 42% Very Unlikely 3% 5% 6% 5% 2% 4% 6% 7% 8% 14% 20% 14% 23% Aon Hewitt 29
Page 1 and 2: Consulting/HR Outsourcing Retiremen
Page 3 and 4: 4 10 14 33 42 48 2012 Hot Topics in
Page 5 and 6: Enhanced Automation and Individuali
Page 7 and 8: Defined Contribution Plans: Increas
Page 9 and 10: Retiree Medical Plans: Reducing Cos
Page 11 and 12: Defined Benefit Status —Among Spo
Page 13 and 14: Retirement Plan Initiatives for 201
Page 15 and 16: Employers understand the importance
Page 17 and 18: Initial Contribution Rate Default U
Page 19 and 20: Contribution Escalation Getting ind
Page 21 and 22: Roth Most financial experts agree t
Page 23 and 24: Employer Matching Contributions Inv
Page 25 and 26: Current and Future Actions on Targe
Page 27: Barriers to Adding Retirement Incom
Page 31 and 32: Managing Risk and Plan Expenses Ove
Page 33 and 34: Defined Benefit Plans Likely Change
Page 35 and 36: Likely Actions Planned in 2012 Risk
Page 37 and 38: Confidence and Priority Level of Ri
Page 39 and 40: Pension Plan Funded Status With his
Page 41 and 42: Funding Policy One-half of responde
Page 43 and 44: Percentage of Employers With a Pre-
Page 45 and 46: Changes to Benefits From 2011 to 20
Page 47 and 48: Likely Changes to Retiree Health Be
Page 50: About Aon Hewitt Aon Hewitt is the

2012 Hot Topics in Retirement - Aon

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