Investment consultancy Aon Hewitt is partnering with BlackRock to target defined contribution plans.

It will push further into directly managing pension schemes with the launch of a delegated management service for trust-based defined contribution schemes.

The service will enable schemes to access professionally constructed investment choices – as well as offering better diversification through a wider range of investment options and a more nimble approach, while allowing trustees to focus on more strategic issues.

Aon Hewitt's advisers will design and manage a series of "target-date" funds for pension scheme members, with BlackRock providing the underlying investment building blocks such as equity and bond funds.

Aon Hewitt EMEA chief executive Andy Cox said: "Creating better DC has been a key aim for us for some time. That means delivering a more effective investment approach, capable of greater speed of action, using best in class managers and better diversification - all with the ultimate aim of better outcomes for members."

Target-date funds are umbrella funds made up of underlying investments. They move savers from higher-risk assets, such as equities, into lower-risk investments, like bonds, as they age.

Trustees of company DC pension plans can either buy these funds off-the-shelf, or sit down with Aon Hewitt's advisers to design their own bespoke strategies.

Aon's new service is similar to fiduciary management - the all-in pension fund management service that it, and rivals such as Towers Watson and Mercer, offer to companies running old-style defined benefit schemes, also known as final-salary pension schemes.

BlackRock managing director of UK defined contribution Paul Bucksey added: "This is a compelling new service for DC schemes which aims to provide better outcomes for pension savers. With access to the broadest range of investment tools, a global view and an established risk analysis framework, we are uniquely positioned to provide the investment infrastructure behind it."

First published - 16.10.2014

Lindsay.sharman@wilmington.co.uk