LONDON, 21 June 2006 – The closure of Defined Benefit (DB) pension schemes in the UK is expected to continue in the next three years, according to the latest research from Aon Consulting.

The table below summarises the findings from a survey of 115 UK companies operating DB schemes and illustrates the move away from a DB pension scheme over a six-year period, assuming that 50% of those considering closure go ahead with the change.

As seen in the table above, almost a third (27%) of schemes surveyed remained open to new members at the present time. When probed on the reasons for remaining open to new staff hires, six in ten respondents (61%) said they believed the scheme was "the right type of pension for my company". A large percentage of respondents (43%) also claimed that they had left the scheme open because their DB plan was a valuable recruitment tool. However, as the table above illustrates, even these schemes are under pressure to change and the harsh realities of DB pension costs will eventually outweigh their preferences for DB.

The majority of schemes in the survey (61%) are currently closed to new members but open to accrual. A fifth (20%) of these are considering closing to accrual in the next 12 months, and four in ten (40%) in the next three years. The rate at which this change is taking place is slower than the close to new hires, reflecting the more difficult nature of the change. Common reasons cited for remaining open to accrual to date included a belief that the process of closure to accrual would be too painful (32%), board resistance (36%), and union and employee pressure (38%).

Paul McGlone, Head of Employer Advice at Aon Consulting, said: ‘What we're likely to see is that phase II of closure - that is closure to accrual - will take place over a much longer period of time than the rate of closure to new staff hires. Closure to accrual remains a very difficult step for any employer to take and that is why so many are giving serious consideration to changing the level of compulsory contributions, increasing retirement age, or reducing the benefit accrual rate as a means of staving off the expense and uncertainty of DB pension provision in the interim.

‘The decision to close to future accrual will get easier over time, as fewer existing employees remain in the scheme. Companies with a high staff turnover rate may be able to wait for the majority of final salary members to leave naturally and tackle the closure issue when it is more manageable. However, those with low turnover will find that their final salary membership remains large for a significant period. The question for these businesses is whether the pain of going through closure and all of the associated staff difficulties is greater or less than the pain of continuing to accrue final salary benefits.’

Notes to editor:

The research surveyed 115 UK companies operating defined benefit schemes in January 2006. Of the 115 companies polled:

• 59% were closed to new members but continued to accrue benefits
• 27% were open to new members and accrual of benefits
• 11% were closed to new members and accrual
• 1% were in wind up

About Aon Consulting

Aon Consulting is a leading human capital consultancy, helping organisations of every size to attract and keep the employees they need. We advise on all aspects of employment, including health-related insurance and risk; employee compensation and pensions; human resource strategy planning; job design and change management; and staff assessment and legal issues. Aon Consulting is a division of Aon, one of the UK’s largest insurance brokers and providers of risk management services and a major force in reinsurance and the UK human capital consulting market. Aon Consulting Limited is authorised and regulated by the Financial Services Authority.

About Aon

Aon Corporation is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 46,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to execute the stock repurchase program, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s filings with the Securities and Exchange Commission.