Aon Aims to Sell U.S. Retirement Business to PE Firm Aquiline

The firm also intends to sell the Aon Retiree Health Exchange business to Alight, at least in part to head off potential antitrust concerns associated with its ongoing merger with Willis Towers Watson.

News emerged Thursday that Aon has signed definitive agreements to sell its U.S. retirement business to Aquiline and its Aon Retiree Health Exchange business to Alight.

According to a statement from Aon, the total gross monetary value of the deal is approximately $1.4 billion, and the agreements are intended to “address certain questions raised by the U.S. Department of Justice in relation to the combination with respect to the markets in which these businesses are active.”

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In other words, the move is intended to resolve potential future antitrust issues for Aon while it works on its proposal to merge with Willis Towers Watson. According to the statement announcing the new deals, Aon and Willis Towers Watson continue to work toward obtaining regulatory approval in all relevant jurisdictions.

“These agreements further accelerate our momentum to close our proposed combination with Willis Towers Watson,” explains Greg Case, Aon’s CEO. “These are very capable teams that have demonstrated exceptional dedication to our clients and our firm. I want to recognize their contributions and reinforce that we are confident they will have similar opportunities with Aquiline and Alight.”

Retirement industry professionals will recall that this is not the first acquisition Aquiline has made in the space this year. Back in January, the private equity firm acquired a majority stake in SageView Advisory Group. Other well-known private equity firms have been active in the industry as well, including GTCR, which first took a minority stake in CAPTRUST before teaming up with Reverence Capital Partners to acquire Wells Fargo Asset Management.

For context, the proposed combination of Aon and Willis Towers Watson, which was first announced in 2020, is still undergoing regulatory review. In anticipation of potential antitrust scrutiny, Aon and Willis Towers Watson previously announced the divestiture of Willis Re, a set of Willis Towers Watson corporate risk and broking and health and benefits services, and Aon’s retirement and investment business in Germany.

With this latest development, the U.S. retirement business Aquiline will acquire includes approximately 1,000 staff, and the agreement covers U.S. core retirement consulting, U.S. pension administration and the U.S.-based portion of Aon’s international retirement consulting business—along with many individual solutions and tools, including the Aon Pooled Employer Plan (PEP).

The agreement with Aquiline does not include Aon’s non-U.S. actuarial, non-U.S. pension administration or international retirement businesses based outside of the U.S.

Aquiline Capital Partners is a private investment firm based in New York and London that invests in companies across financial services, technology, business services and healthcare. With $6.4 billion in assets under management, the firm has invested in numerous businesses that help people plan and save for retirement.

“The retirement solutions sector is benefitting from an increased focus on long-term investment security and risk management of plans,” says Jeff Greenberg, Aquiline’s Chairman and CEO. “Aquiline’s significant experience across retirement and investments positions us to build on the strong business Aon has created. We look forward to working closely with the clients, management and colleagues of Aon’s U.S. retirement business to create further value for all stakeholders.”

Greenberg notes that all of the announced regulatory divestitures are contingent on the completion of the pending Aon and Willis Towers Watson combination, as well as other customary closing conditions. While Aon and Willis Towers Watson are working toward completing the proposed combination “as soon as possible in the third quarter of 2021,” the completion remains subject to the receipt of required regulatory approvals and clearances, including with respect to United States antitrust laws, as well as other customary closing conditions.

The New Retirement Income Vernacular

DCIIA has published a new glossary on esoteric retirement income terms that advisers may not have heard of.


Ever hear of an annuity rollover service? What about a money out report, cognitive risk or global risk?

To help retirement plan sponsors that are thinking of offering retirement income options get a better grasp of this new lingo, the Defined Contribution Institutional Investor Association (DCIIA) has issued a glossary of decumulation terms that will likely get sponsors’, and advisers’, tongues wagging. It is the latest installation of DCIIA’s retirement tier series on how retirees use various types of retirement income services and products to fulfill their income needs as their spending, health and goals change.

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The glossary also includes a section giving detailed, easy-to-understand information on the various types of annuities.

Jody Strakosch, one of the founding members of DCIIA and now a principal, who was in retirement income product development with MetLife for 30 years, tells PLANADVISER that DCIIA will continue to issue glossaries as new developments in the retirement planning industry unfold. An example of this is the glossary it recently issued on financial wellness, as this became a buzzword and, in 2016, on automatic features.

The retirement income glossary was born out of the January 20 DCIIA Annual Innovation Forum, “where the retirement income committee was talking about projects it could work on,” she says. Representatives from many different players in the retirement planning industry—including Employee Retirement Income Security Act (ERISA) attorneys and leading investment and recordkeeping firms including American Century, BlackRock, Fidelity and MassMutual—worked collaboratively on the glossary.

DCIIA hopes it will help advisers prompt their sponsor clients to ask important questions, such as, “Do we want to keep retirees in the plan? If so, what tools and services should we be offering?” Strakosch says. “We thought it would be helpful to create a glossary to accompany the retirement tier. Literally, DCIIA members went through the initial retirement tier paper to pull out key terms to create the glossary, thinking about it from both the plan sponsor’s and the plan participant’s perspective.

“I personally think having the opportunity to recreate a paycheck in your retirement is an important tool for participants,” Strakosch continues. “Just like the Pension Protection Act [PPA] put plan sponsors at a crossroads in 2006, prodding them to embrace automatic enrollment into a qualified default investment alternative [QDIA], sponsors are once again at a crossroads with respect to helping retirees wisely spend their money with both in-plan and out-of-plan income and annuity solutions.

“Between 2008 and 2014,” she notes, “the retirement planning industry developed a great many retirement income products offering guaranteed income or that are insurance-based, married with an asset manager.”

This is why the glossary includes annuities definitions to help sponsors better understand these new product developments, she says.

“Some products may not be the best thing for every participant,” Strakosch says. “In some cases, they may need customized or personalized solutions. That’s super important for sponsors to realize. That’s why the income annuity section is so important for sponsors to understand, so they can offer these to participants.”

Besides making annuities available either in-plan or out-of-plan, sponsors can also select “an annuity marketplace platform where participants can shop for various brands of annuities, from multiple insurance companies, in an apples-to-apples comparison much like the platforms that Hueler and Fidelity Investments offer,” Strakosch says. “The platform can show participants how much their buying power today would bring them in terms of monthly retirement income, to help them make a decisions about purchasing an immediate income, a longevity or a variable annuity, the latter of which is a little more complicated.”

The Money Out Blueprint

The “money out” term refers to a report that recordkeepers can provide to advisers and sponsors on withdrawals at the plan level, much like a blueprint, Strakosch says. If the adviser couples the money out report with plan demographic analysis, they can get a good sense of their client’s plan’s particular needs.

“It could show them, for instance, that only 10% of their employees are over the age of 40—or, more probably, 60% of the plan’s assets are sitting with 50% of the employees, who are all going to leave in the next three years,” she explains.

With respect to cognitive risk—one of several retirement risks in the glossary—of course this refers to dementia, Parkinson’s and Alzheimer’s Disease, Strakosch says. “Cognitive risk is a big consideration [for participants and sponsors], as is longevity risk,” she says. “Nobody knows how long they will live—but, generally, people don’t realize how long they will live.”

Global risk refers to geopolitical, economic and health events, such as the COVID-19 pandemic—that could impact economies, the markets, interest rates and inflation—and, in turn, threaten retirees’ savings.

Personal Consumption Risk

The glossary also includes the term personal consumption risk, referring to retirees who overspend and run out of money as well as those who underspend, which typically is more often the case, Strakosch says. This term can serve as a compass for sponsors and their plan adviser “to help individuals figure out their personal consumption needs,” Strakosch says.

The bottom line is that DCIIA hopes plan sponsors use the retirement income glossary “as a reference point to help them start thinking about what makes sense for their plan and their participants, and how they want to implement a retirement tier of tools, services and products—if they want to keep participants in the plan. If they do that, their 401(k) is no longer just a savings plan but a true retirement plan.”

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