2012 Hot Topics in Retirement - Aon

Likely Actions Defined Benefit Plan Sponsors Will Take in 2012
Completed
Recently/
Not Needed Actions
29%
24%
22%
19%
17%
15%
14%
10%
9%
7%
7%
5%
4%
3%
3%
(n ranges from 229 to 237)
36 Aon Hewitt
Conduct an asset-liability study
Adjust equity exposure and/or
overall asset allocation
Adjust plan investments to better
match the characteristics of the plan’s
liabilities (e.g., liability-driven investing,
or LDI)
Review funding strategy
Perform funding and accounting
projections
Assess the risks (financial and
nonfinancial) that the pension plan is
running based on current strategies
Add or liberalize a lump-sum option
O�er lump sums to terminated vested
participants to decrease liabilities
and risk
Allow in-service distributions as early
as age 62 as permitted by the PPA
Change to mark-to-market accounting
Contribute more than the IRS
minimum required contribution
Purchase annuities for retirees
Transfer the plan (both assets and
liabilities) to another party to reduce
risk exposure
Transfer excess pension assets into a
health benefits account under Code
section 420
Use a buy-o�ering (e.g., entering an
agreement to transfer risk to a third party)
Likely to Do in 2012
(Among Those Plans That Have Not Recently Completed)
Very
Likely
23%
27%
17%
31%
67%
32%
6%
14%
1%
2%
19%
2%
2%
0%
1%
Somewhat
Likely
31%
31%
32%
45%
22%
31%
13%
21%
6%
9%
23%
4%
4%
0%
2%
Somewhat
Unlikely
20%
25%
24%
12%
3%
12%
16%
19%
18%
24%
18%
17%
9%
4%
11%
Very
Unlikely
26%
18%
27%
12%
8%
26%
65%
47%
74%
65%
40%
76%
85%
96%
86%