The Aon Pooled Employer Plan: An Inflation Fighter

The Aon Pooled Employer Plan: An Inflation Fighter
February 24, 2023 4 mins

The Aon Pooled Employer Plan: An Inflation Fighter

The Aon Pooled Employer Plan: An Inflation Fighter Hero Banner

While market volatility has decreased the value of 401(k)s, pooled employer plans can produce savings.

Key Takeaways
  1. As inflation takes a bigger chunk out of paychecks, market volatility has decreased the value of 401(k) accounts and other savings.
  2. Despite this double whammy, Aon and its pooled employer plan (PEP) for 401(k) benefits produce cost savings, leaving more money in accounts and helping American businesses be leaner.

As the name implies, PEPs provide pooling of plan assets and administration, resulting in less work and risk for American companies. The leverage created by pooling allows organizations to provide a compelling 401(k) benefit and, at the same time, take advantage of economies of scale to decrease costs. All of this leads to more money in 401(k) accounts. In fact, average total plan cost savings are in excess of 40% for participants from the 50 organizations that have joined or committed to the Aon PEP.

In addition, a year-over-year decrease in cost for Aon PEP participants is helping offset the impacts of inflation. On average, employees participating in the Aon PEP will see an additional decrease in the per-participant PEP fee of 5.7% in 2023. This compares to an increase in costs due to inflation for all urban consumers (CPI-U) of 6.5% through December 2022. The net difference is over 12%.

The Aon PEP offers the opportunity for employers to do less work to offer a competitive 401(k) benefit to their people. This is another example of the inflation-fighting ability of PEPs — helping American businesses and employers be leaner, more productive, and more strategic. The Aon PEP also relieves company executives from the fiduciary duties associated with monitoring and managing 401(k) investment line-ups, which can be especially challenging and taxing during volatile markets.

Aon is pleased to be able to offer this solution to enhance retirement savings for American workers during these challenging economic times. To learn how the Aon PEP could benefit your organization and your people, please visit www.aon.com/en/capabilities/pensions-and-retirement/pooled-employer-plans or contact your Aon consultant.

  • 40%

    Average total plan cost savings are in excess of 40%

  • 5.7%

    Average additional decrease in the per-participant PEP fee of 5.7% in 2023 (1)

    (1) Per participant fees for the Aon PEP based on participants in both 2022 and 2023. Fee determinations are based on participation information as of September 30, 2021, and September 30, 2022.

Investment Disclaimer

Investment advice and consulting services provided by Aon Investments USA Inc. (“Aon Investments”). The information contained herein is given as of the date hereof and does not purport to give information as of any other date. The delivery at any time shall not, under any circumstances, create any implication that there has been a change in the information set forth herein since the date hereof or any obligation to update or provide amendments hereto. This document is not intended to provide, and shall not be relied upon, for accounting, legal or tax advice or investment recommendations. Any accounting, legal or taxation position described in this presentation is a general statement and shall only be used as a guide. It does not constitute accounting, legal, and tax advice and is based on Aon Investments’ understanding of current laws and interpretation. This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon Investments’ preliminary analysis of publicly available information. The content of this document is made available on an ‘as-is’ basis, without warranty of any kind. Aon Investments USA Inc. disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Aon Investments USA Inc. reserves all rights to the content of this document. No part of this document may be reproduced, stored or transmitted by any means without the express written consent of Aon Investments USA Inc. Aon Investments USA Inc. is a federally registered investment advisor with the U.S. Securities and Exchange Commission. Aon Investments USA Inc. is also registered with the Commodity Futures Trading Commission as a commodity pool operator and commodity trading advisor and is a member of the National Futures Association. The Aon Investments USA Inc. ADV Form Part 2A disclosure statement is available upon written request to: Aon Investments USA Inc. ATTN: Aon Investments USA Inc. Compliance Officer 200 E Randolph ST STE 700 Chicago, IL 60601

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Labs

Stay in the loop on today's most pressing cyber security matters.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
View All
Subscribe CTA Banner