Employee Benefits

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Employee Benefits

Employee Benefits

The following table provides the components of the net periodic (benefit) cost recognized in the Condensed Consolidated Statements of Income for Aon’s significant U.K., U.S., and other major pension plans, which are located in the Netherlands and Canada. Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions):

	Three Months Ended June 30,
	U.K.				U.S.				Other
	2023		2022		2023		2022		2023		2022
Service cost	$	—	$	—	$	—	$	—	$	—	$	—
Interest cost	36		21		26		17		10		4
Expected return on plan assets, net of administration expenses	(48)		(34)		(30)		(27)		(12)		(8)
Amortization of prior-service cost	1		—		—		—		—		—
Amortization of net actuarial loss	19		8		8		17		4		3
Net periodic (benefit) cost	8		(5)		4		7		2		(1)
Loss on pension settlement	—		—		—		—		27		—
Total net periodic (benefit) cost	$	8	$	(5)	$	4	$	7	$	29	$	(1)
	Six Months Ended June 30,
	U.K.				U.S.				Other
	2023		2022		2023		2022		2023		2022
Service cost	$	—	$	—	$	—	$	—	$	—	$	—
Interest cost	72		44		52		34		20		9
Expected return on plan assets, net of administration expenses	(94)		(70)		(60)		(54)		(24)		(17)
Amortization of prior-service cost	1		1		—		—		—		—
Amortization of net actuarial loss	37		15		17		33		7		7
Net periodic (benefit) cost	16		(10)		9		13		3		(1)
Loss on pension settlement	—		—		—		1		27		—
Total net periodic (benefit) cost	$	16	$	(10)	$	9	$	14	$	30	$	(1)

In May 2023, to further its pension de-risking strategy, the Company settled certain pension obligations in the Netherlands through the purchase of annuities, where certain pension assets were liquidated to purchase the annuities. A non-cash settlement charge totaling $27 million was recognized in the second quarter of 2023.

In the first quarter of 2022, the Company recognized a non-cash settlement charge of approximately $1 million. Settlements from a certain U.S. pension plan exceeded the plan’s service and interest cost. This triggered settlement accounting which required the immediate recognition of a portion of the accumulated losses associated with the plan.

Contributions

Assuming no additional contributions are agreed to with, or required by, the pension plan trustees, the Company expects to make total cash contributions of approximately $4 million, $43 million, and $14 million, (at December 31, 2022 exchange rates) to its significant U.K., U.S., and other major pension plans, respectively, during 2023. The following table summarizes contributions made to the Company’s significant pension plans (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Contributions to U.K. pension plans	$	1	$	2	$	2	$	5
Contributions to U.S. pension plans	5		7		21		25
Contributions to other major pension plans	2		2		8		10
Total contributions	$	8	$	11	$	31	$	40