Search the News Archive

Fourth Circuit Affirms Aon Hewitt Did Not Breach ERISA Fiduciary Duties in Cross-Selling Services and Managing Lowe's 401(k) Plan

"[T]he court found that Aon was not acting as an ERISA fiduciary when it engaged in cross-selling of additional services at the time that it was recommending that Lowe's restructure its retirement plan.... Second, the court found that Aon did not violate its ERISA fiduciary duty of loyalty by recommending that the plan adopt a streamlined investment menu which happened to play to its interest." [Reetz v. Aon Hewitt Investment Consulting Inc., No. 21-2267 (4th Cir., July 17, 2023)]

Aon Hewitt, Alight Win Lawsuit Alleging Pension Risk Transfer Failures

"Among other claims, the lawsuit alleged that Aon Hewitt didn't perform all the communications services that it was contracted to perform, resulting in only 67% of eligible plan participants electing a lump-sum distribution instead of a projected 80% of participants." [Foundation Resolution Corp. v. Aon Hewitt Investment Consulting, Inc., No. 18-458 (M.D. Fla. Apr. 22, 2021)]

Lowe's, Aon Hewitt Targeted Over $100M in 401(k) Losses

"The proposed class action ... challenges Lowe's decision to move more than $1 billion in 401(k) assets into the Hewitt Growth Fund. The fund was untested -- with no large retirement plan investors and only $350 million in assets before the Lowe's plan's investment -- and performed worse than the funds previously in the company's 401(k) plan, the lawsuit claims. Both Lowe's and Aon Hewitt, which provides investment consulting services to the Lowe's plan, are accused of breaching their fiduciary duties under [ERISA]."

Court Dismisses Fiduciary Breach Claims Against Aon Hewitt with Respect to Financial Engines Arrangement

"[T]he fact that courts are dismissing these cases against providers does not mean that a participant advice arrangement cannot violate ERISA. Indeed, it is certainly possible that such an arrangement could be unreasonably priced. In this regard perhaps the most interesting language in the decision was the court's explanation of the 'reasonableness' standard in this context: The analysis is to focus on the fair market value of the the services as a bundle, not on how the two service providers -- the recordkeeping platform provider and the advice provider -- divide up the total fee." [Scott v. Aon Hewitt Fin. Advisors, LLC, No. 17-679 (N.D. Ill. Mar. 19, 2018)]

Aon Hewitt Sued Over Fee Arrangement with Investment Advisor for Caterpillar's 401(k) Plan

"Aon Hewitt devised an arrangement with Financial Engines for investment advice services that resulted in collecting unreasonable and excessive fees at the expense of Caterpillar Inc.'s 401(k) plan participants, according to a lawsuit filed Jan. 27 ... The lawsuit seeks class treatment for thousands of participants. Aon Hewitt and its subsidiaries engaged in a kickback scheme with Financial Engines that resulted in millions of dollars in plan losses in violation of [ERISA], the complaint alleges."

Aon Hewitt Comment Letter to PBGC on Regs Requiring Greater Reporting by Pension Plan Sponsors

"Aon Hewitt made the following recommendations regarding the proposed regulations: Modify and clarify requirements for financially sound plan sponsors or controlled group members.... Lower the criteria for plan financial soundness.... Provide exemptions for active participant reduction reportable event requirements.... Simplify waivers for controlled groups."

Towers Watson Joins Aon Hewitt, Mercer As Private Exchange Competition Sizzles

"Competition in the multi-carrier private exchange space is accelerating quickly ... Ken Sperling, Aon Hewitt's national health care exchanges strategy leader, [says] he sees growing interest among both employers and employees in the private health care exchange concept. 'In fact, according to Aon Hewitt's data, more than 26% of employers see a future where exchanges are the preferred approach to employer-sponsored health care benefits,' he says."

Aon Hewitt's Global Pension Risk Survey: U.S. Plan Sponsor Report (PDF)

Our U.S. plan sponsor report finds transformation taking place in the attitudes, strategies, and governance practices of pension plan sponsors. Learn more about this transformation, and how it may represent one of most imporant shifts in pension plan invesment management practices since the 1980s.

Aon Hewitt Comments on Requirements Prohibiting Discrimination in Favor of Highly Compensated Individuals in Insured Group Health Plans (PDF)

"[The comment letter] addressed the following issues: Transitional relief; Who is the employer for testing purposes; Dates for determining testing population; Identifying highly compensated individuals; Excludable employees; Retiree-only fully insured group health plans; The required Code Section 105(h) nondiscrimination tests; Clarification of excise tax; and Small employer exception."

Aon Hewitt Can't Escape Safeway's 401(k) Fee Lawsuit

"[The federal district judge] rejected Aon's argument that it didn't breach its fiduciary duty of prudence because it had in place a 'master consulting agreement' with Safeway that established Aon's 'robust process' in providing 'ongoing consulting and performance evaluation.' The terms of the agreement, standing alone, can't establish that Aon acted prudently, and the fact that an agreement exists doesn't prove it was followed, [the judge] said." [Terraza v. Safeway Inc., No. 16-3994 (N.D. Cal. Dec. 11, 2017)]