Aon Hewitt Launches Institutional Investment Exchange

DC Nexus is designed to supplement their existing plan investment management and governance processes, and better manage their DC plans through increased investment flexibility, fee transparency and decision support. DC Nexus is part of Aon Hewitt’s suite of retirement solutions that help improve employees’ financial wellness and enable plan sponsors to implement new and sustainable benefits strategies, manage fiduciary risk and leverage institutional purchasing power.

DC Nexus creates an institutional investment exchange that facilitates increased fee transparency and provides better control over plan expenses. The exchange leverages Aon Hewitt’s open architecture to enable users to obtain clear pricing information on multiple competing investment alternatives, including institutional investment vehicles, before a final hiring decision is made for a given mandate.

According to Aon Hewitt’s research, there has been a significant increase in the number of plan sponsors using institutional fund options in their DC fund lineups. Today, 90% of large plan sponsors offer at least one institutional fund option, and approximately one-third of plans utilize institutional vehicles as the majority of their fund options, compared with 58% and 19%, respectively, in 2007. Despite the strong benefits of institutional investment alternatives, such as lower expense ratios, the research findings indicate that most plan fiduciaries currently lack the ability to compare transparent fee information for these funds in one place.

In addition, more than three-quarters of plan sponsors said that the level of scrutiny they face today is either high or very high and more than 80% report that the level has increased in the last two years.

Winfield Evens, director of outsourcing investment strategy at Aon Hewitt, said, “DC Nexus helps plan sponsors evaluate their own plan offerings against the wider universe of institutional investment vehicles available, to optimize their DC plan performance and ultimately improve participant outcomes.”

DC Nexus also features:

• Plan Information – On-demand access to current plan and fund information, including performance, balances and fees. Users can access both high-level and detailed information for investment options in their plans whenever needed.
• Analytics – Detailed analytics tools allow plan sponsors and their consultants to thoroughly research and quantitatively measure existing plan options and assess alternative investment options. Users also have complimentary access to information and analytics from eVestment Alliance, a leading institutional database, for information on the broad universe of investment alternatives.
• Education – Retirement research and thought leadership that keeps plan fiduciaries informed of the latest retirement trends and opportunities. Users can readily access Aon Hewitt research, as well as information curated from across the industry.

DC Nexus is available to all Aon Hewitt DC recordkeeping clients, which represent more than $330 billion in DC assets. Approximately three-quarters of Aon Hewitt’s recordkeeping clients currently have access to DC Nexus, and the remainder will have access by year's end.

More information on DC Nexus can be found here.