Aon has launched the ‘Zone Framework’ to help pension schemes navigate funding improvements and expanded endgame options.
According to Aon, many schemes now aim to “preserve and capitalise” on their improved positions, requiring a fresh investment approach.
The framework offers support for a wider range of medium- and long-term investment goals and helps investors reassess objectives and explore new opportunities.
The Zone Framework, now being rolled out to Aon’s UK investment clients, consists of four segments: identifying investment priorities such as asset growth, downside protection, or endgame execution; optimising the investment strategy based on these priorities; navigating opportunities to capitalise on market conditions; and evaluating progress against key objectives.
According to Aon, the framework has received positive feedback, with some early adopters adjusting strategies and raising return targets to align with medium-term goals.
Aon senior partner and head of investment strategy in the UK Daniel Peters says: “Designing a successful investment strategy is as much about asking the right questions as providing the right answers. The Zone Framework allows trustees and sponsors to ask the right questions and to identify clearly what success means to them. This helps them to balance risk management with growth which is crucial if investors are to avoid falling into the trap of overly conservative strategies that can actually increase the risk of a deficit reappearing.
“This new innovation is resonating with our pension scheme clients and we are looking forward to working with them to drive better decisions and outcomes.”
Aon associate partner in Investment in the UK Shelley Fryer says: “With improved funding levels, we are seeing a shift from a traditional journey-focused strategy to a more stable ‘zone’ mindset, where investors can feel more comfortable with their current positions. By identifying which ‘zone’ they are in — growth, protection, or endgame — trustees and sponsors can set their priorities, implement strategies appropriate for their zone and ensure their monitoring is linked to those goals.”
