With many companies exploring how to unlock surplus from their defined benefit (DB) pension schemes, one approach is to use the surplus to fund defined contribution (DC) benefits from the same trust. The challenge is to do it in a way that optimises the employee experience and minimises additional governance for the DB trustee board.
To address this, Aon created its Blended DC Solution, which mirrors all the features of The Aon MasterTrust within a company's own trust. Through this approach, members accumulate DC benefits in the DB trust and then, on leaving the firm, are automatically transferred to The Aon MasterTrust. By ‘blending' the DB and DC arrangements the member experience, including access to investment options and charges, is seamless as they move from one arrangement to the other.
Having gone live in 2024, Aon's Blended DC Solution is now supporting over £1 billion of assets across three large international organisations, including Aon's own pension arrangement. It is particularly suited to companies who want to use DB surplus to fund DC within their own trust, regardless of whether a DC section is already in place. Implementation of this approach is delivered by Aon's transition team, which provides high-quality, tailored implementation support at no additional cost.
The implementation process can also be a powerful way to increase member engagement. In Aon's case, an impressive 77% of employees have now logged into their accounts as a result of the supporting transition communication campaign.
Jane Kielty, Aon's Chief Executive Officer for Aon's UK business, believes the Blended DC Solution underscores Aon's commitment to delivering value for all the stakeholders involved.
It has helped us to unlock DB surplus, while continuing to bring a top-quality pension experience to employees. This solution is expected to create more than £100m of value for Aon's UK business over the next 10 years — with our DC contributions now funded directly by the DB surplus, we can reinvest that cash.
Additionally, we are using a portion of the surplus to increase our employer pension contribution, with the aim of creating better retirement outcomes for our colleagues, strengthening our employer value proposition and continuing to attract and retain the best talent."
For organisations, the benefits of Aon's Blended DC Solution include a tried-and-tested approach to unlocking DB surplus and the ability to free up cash flow to create shareholder value by deploying DB surplus to fund DC contributions. Companies can also benefit from frictionless transfers between a company's own trust and master trust, with no transaction costs and no out-of-market investment risk.
Members will have access to the same high-quality administration, member communication and investment options as The Aon MasterTrust, including Aon's multi-award-winning default investment strategy. Additionally, the same member site and login details throughout members' retirement journey, giving a consistent user experience.
For more information, email [email protected]
About Aon Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that help protect and grow their businesses. Follow Aon on LinkedIn, Twitter, Facebook and Instagram. Stay up-to-date by visiting the Aon Newsroom and sign up for News Alerts here. aon.com Copyright © 2025 Aon Solutions UK Limited, registration number 4396810 and Aon Investments Limited, registration number 5913159, both of which are registered in England and Wales have their registered office at The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN. Tel: 020 7623 5500. All rights reserved. aon.com.
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