On January 25, 2024, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Aon Investments USA Inc., fka Aon Hewitt Investment Consulting, Inc. (“Aon”) (collectively, the “Respondents”). In the Order, the Commission found misconduct by registered investment adviser Aon that was inconsistent with its duty to its client, the Pennsylvania Public School Employees’ Retirement System (“PSERS”) under the Advisers Act. According to the Order, from 2013 through 2023, Aon has acted as an investment adviser for PSERS and provided certain investment advisory and investment consulting services to PSERS pursuant to a written agreement. As set out in its agreement with PSERS, Aon was responsible for, among other things, calculating PSERS’s investment returns, which were then used for calculating what is known as “risk share.” Risk share is a provision in the Pennsylvania Pension Code that requires certain public school employees to contribute more to the retirement fund if certain annualized investment return targets, or “hurdles,” are not met.

The Commission found that Respondent acted inconsistent with its duties as an investment adviser to PSERS by failing to adequately investigate a discrepancy between the underlying performance data used by Respondent to calculate the Risk Share Return Rate and the historically reported returns and by making material misstatements and omissions in communications to PSERS concerning the causes of the discrepancy and the extent to which Respondent understood those causes. As a result of the conduct described herein, Respondent violated Section 206(2) of the Advisers Act.

The Commission ordered Aon to pay $495,098.50 in disgorgement, $47,089.29 in prejudgment interest, and $1,000,000 in a civil money penalty, for a total of $1,542,187.79, to the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties collected, along with the disgorgement and interest collected, could be distributed to harmed investors (the “Fair Fund”). See the Commission’s Order: IA-6536.

The Fair Fund consists of the $1,542,187.79 collected from the Respondents. The Fair Fund has been deposited in a Commission-designated account at the U.S. Department of the Treasury, and any accrued interest will be added to the Fair Fund.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov