LONDON, (23 March) 2017- Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has announced that it has completed the first unwinding of a longevity swap.
In December 2016, the PGL Pension Scheme agreed to transform the insurance terms of the swap, replacing it with a £1.2bn annuity with Phoenix Life, which added to the risk transferred from the scheme.
Aon has advised the scheme's trustee along a de-risking path for several years. During this time:

• The scheme first hedged all of its key financial risks using liability driven investment (LDI).
• It then addressed other risks for its pensioners; in 2014, Aon advised the trustee on the purchase of a longevity swap, also with Phoenix Life (part of the sponsoring employers' group).
• The scheme also invested in innovative illiquid asset strategies and has delivered stable positive returns.
Favourable asset performance, together with a successful liability management programme, led to the scheme making 2016's largest bulk annuity purchase. Crucially, by arranging the longevity swap in advance, the trustee was able to agree beneficial pricing for the annuity conversion.
The annuity terms were expressly tailored to the scheme's circumstances and included an all-risks cover for residual risks and a new collateral structure to back the annuity which gives substantial additional protection. Advance planning allowed the annuity to be implemented as soon as it was feasible, even though it was near the Christmas market close.

Dominic Grimley, Risk Settlement adviser at Aon Hewitt, said:
'Bringing so many elements of the scheme together in this way was a particularly rewarding experience. Reaching this point was only possible due to the hard work and belief from the trustee and employer, combined with strong stewardship of the scheme.'

This initiative was part of a wider framework under which the trustee and employer are continuing to work together to support further de-risking. This framework is designed to steadily improve the scheme's financial position further through measured risk-taking, increasing the options available to members, and an agreed funding plan.

Media Contact
For further information please contact:

Colin Mayes Marina Jane Sanchez
Aon Hewitt CNC
01372 733689 020 3219 8811
colin.mayes@aonhewitt.com marina.jane-sanchez@cnc-communications.com

Notes to Editors

About Aon

Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and
reinsurance brokerage, and human resources solutions and outsourcing services. Through its more
than 72,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via
innovative risk and people solutions. For further information on our capabilities and to learn how we
empower results for clients, please visit: http://aon.mediaroom.com.

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AON plc published this content on 23 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 23 March 2017 10:32:22 UTC.

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