SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
__X__ Annual Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1997
OR
_____ Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
A. Full title of the plan and the address of the plan, if
different from the issuer named below:
Aon Savings Plan
B. Name of the issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Aon Corporation
123 N. Wacker Drive
Chicago, Illinois 60606
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan,
by the Plan Administrator, the Committee, has caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
County of Cook and the State of Illinois on the 26th day of June, 1998.
AON SAVINGS PLAN
BY THE COMMITTEE
/s/ THOMAS STACHURA /s/ JOHN A. RESCHKE
- - - - - - - - - - - - - - - - - --------------------------- -----------------------------
Thomas Stachura John A. Reschke
/s/ VIRGINIA G. SCHOOLEY /s/ ROBERT HURWITZ
- - - - - - - - - - - - - - - - - --------------------------- -----------------------------
Virginia G. Schooley Robert Hurwitz
/s/ FRED PRUDHOMME
- - - - - - - - - - - - - - - - - ---------------------------
Fred Prudhomme
- 2 -
<PAGE>
AUDITED FINANCIAL STATEMENTS AND SCHEDULES
AON SAVINGS PLAN
1997
WITH
REPORT OF INDEPENDENT AUDITORS
<PAGE>
AON SAVINGS PLAN
INDEX TO AUDITED FINANCIAL STATEMENTS AND SCHEDULES
---------------------------------------------------
Page
----
Report of Independent Auditors 1
Financial Statements:
Statements of Net Assets Available
for Plan Benefits at
December 31, 1997 and 1996 2
Statements of Changes in Net Assets Available
for Plan Benefits for the years ended
December 31, 1997 and 1996 3
Notes to Financial Statements 4
Financial Statement Schedules:
Schedule I
Assets Held for Investment as of
December 31, 1997 9
Schedule II
Net Assets Available for Plan Benefits
by Investment Program at December 31, 1997
and 1996 13
Schedule III
Changes in Net Assets Available for Plan
Benefits by Investment Program for the years
ended December 31, 1997 and 1996 15
Schedule IV
Transactions or Series of Transactions in Excess of 5% of the
Current Value of Plan Assets for the year ended December 31, 1997 17
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Participants and Administrative Committee
Aon Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of Aon Savings Plan as of December 31, 1997 and 1996, and the related
statements of changes in net assets available for plan benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1997, and 1996, and the changes in its net assets available for
plan benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment as of December 31, 1997 (Schedule I) and transactions or
series of transactions in excess of 5% of the current value of plan assets
(Schedule IV) for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules have
been subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
June 12, 1998
<PAGE>
<TABLE>
<CAPTION>
AON SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31
---------------------
(thousands)
1997 1996
-------- --------
ASSETS
<S> <C> <C>
Investments, at Fair Value (Notes 1,2, and 3):
United States Government and Government Agency Issues $ 54,658 $ 82,043
Corporate Bonds and Notes -- 6,312
Other Bonds -- 1,028
Common Stocks:
Aon Corporation 392,871 292,189
Other 12 44,202
Preferred Stocks -- 1,616
Investments held in the Aon Funds:
Aon Money Market Fund 29,678 25,754
Aon Government Securities Fund 16,768 12,526
Aon Asset Allocation Fund 79,836 51,743
Aon S&P 500 Index Fund 114,739 70,708
Aon REIT Index Fund 17,923 5,591
Aon International Equity Fund 17,234 11,866
Other Long-Term Investments 14 16
Short-Term Investments 70,779 11,100
794,512 616,694
Unallocated Guaranteed Insurance Contracts, at Contract Value 43,526 79,198
Total Investments 838,038 695,892
Receivables:
Contribution Receivable from Aon Corporation 14,754 13,396
Contributions Receivable from Participants 479 289
Loans Receivable 581 206
Accrued Dividends and Interest 260 824
Due from Broker 16,303 2,977
-------- --------
Total Receivables 32,377 17,692
-------- --------
Total Assets 870,415 713,584
-------- --------
LIABILITIES
Accounts Payable and Accrued Expenses -- --
-------- --------
Total Liabilities -- --
-------- --------
Net Assets Available for Plan Benefits $870,415 $713,584
======== ========
<FN>
See notes to financial statements.
</FN>
</TABLE>
- 2 -
<PAGE>
<TABLE>
<CAPTION>
AON SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Year Ended December 31
----------------------
(thousands)
1997 1996
---- ----
ADDITIONS:
- - - - - - - - - - - - - - - - - ----------
<S> <C> <C>
Investment Income:
Interest and Income from Unallocated
Guaranteed Insurance Contracts $ 10,013 $ 10,947
Aon Corporation Dividends 7,057 6,909
Other Dividends 7,674 1,679
--------- ---------
24,744 19,535
Contributions:
Aon Corporation 14,754 14,056
ESOP Diversification 286 87
Participants 38,762 31,740
53,802 45,883
--------- ---------
78,546 65,418
DEDUCTIONS:
- - - - - - - - - - - - - - - - - -----------
Benefits Paid to Participants 91,982 76,929
Administrative Expenses 861 832
Investment Expenses 199 201
93,042 77,962
========= =========
(14,496) (12,544)
Net Realized and Unrealized Appreciation
in Fair Value of Investments (Note 3) 170,952 86,907
--------- ---------
Net Increases 156,456 74,363
Net Assets Available for Plan Benefits
at Beginning of Year 713,584 639,221
Plan Mergers 375 --
--------- ---------
Net Assets Available for Plan
Benefits at End of Year $ 870,415 $ 713,584
========= =========
<FN>
See notes to financial statements.
</FN>
</TABLE>
- 3 -
<PAGE>
AON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1997 and 1996
1. Description of Plan
-------------------
A. General
The Aon Savings Plan (the "Plan") was authorized by the Board of Directors
of Aon Corporation (the "Company"). The Plan has been designed as a salary
reduction plan under Section 401(k) of the Internal Revenue Code of 1986,
as amended (the "Code").
The Plan is subject to and is designed to comply with the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA") applicable
to defined contribution profit sharing plans, specifically "Title I -
Protection of Employee Benefits Rights," which includes regulatory
provisions regarding reporting and disclosure, participation and vesting,
funding, fiduciary responsibility, administration and enforcement. The
minimum funding standards of Title I do not, however, apply to the Plan.
Certain of the Plan's investments are held by the Aon Funds, an
affiliated, open-end management invest- ment company.
B. Eligibility and Participation
Participation in the Plan is limited to employees who have completed one
year of service and attained the age of 21 or employees who were eligible
under another Plan that was merged into the Aon Savings Plan. An employee
must be employed in the United States on a permanent basis in order to
participate.
C. Contributions
Participant - Participant contributions are made by means of regular
-----------
payroll deductions. Non-highly compensated Participants, as defined by the
Code, may elect to make contributions of between 2% and 10% of their
compensation, as defined by the Plan. Highly compensated participants, as
defined by the Code, may elect to make contributions of between 2% and 6%
of their compensation, as defined by the Plan. Participant contributions
are limited to amounts allowed under the Tax Reform Act of 1986.
Accordingly, the maximum Participant contribution was $9,500 in 1997 and
1996.
Company - The Company will contribute an amount equal to 100% of a
-------
Participant's contributions, on the first 3% of compensation contributed
for the year. The Plan requires that a Participant be actively employed
and contributing to the Plan as of the last day of the Plan year in order
to receive a Company contribution.
- 4 -
<PAGE>
D. Investment Provisions
Contributions to the Plan may be invested in one or more of the following
investment funds:
Money Market Fund - Invested principally in shares of the Aon Money
-----------------
Market Fund of the Aon Funds. The portfolio invests in various types
of high-quality, short-term money market instruments, including
certificates of deposit, commercial paper, U.S. Treasury and Agency
securities and other similar instruments.
Aon Common Stock Fund - Invested principally in common stock of the
---------------------
Company that is purchased on the open market or in private
transactions.
Investment Contract Fund - Invested principally in unallocated
--------------------------
guaranteed insurance contracts, U.S. Treasury bills and short-term
investment funds. In 1995, members of the Company's Investment
Department became managers of this Fund. The Investment Manager is a
fiduciary within the meaning of ERISA Section 3(21). Certain
restrictions and penalties may apply with regard to the termination
of unallocated guaranteed insurance contracts prior to the scheduled
maturity date.
Government Securities Fund - Invested principally in shares of the
---------------------------
Aon Government Securities Fund of the Aon Funds. The portfolio
invests in intermediate and long-term debt securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities.
Total Return Fund - Invested principally in shares of the Aon Asset
-----------------
Allocation Fund of the Aon Funds. The portfolio invests in equity
securities, long-term debt securities and money market instruments.
Common Stock Index Fund - Invested principally in shares of the Aon
-----------------------
S&P 500 Index Fund of the Aon Funds. The portfolio invests in common
stocks traded on the New York Stock Exchange and the American Stock
Exchange and, to a limited extent, in the over-the-counter markets.
Real Estate Securities Fund - Invested principally in shares of the
---------------------------
Aon REIT Index Fund of the Aon Funds. The portfolio invests
primarily in the securities of REITs comprising the Morgan Stanley
REIT Index, which are principally engaged in or related to the real
estate industry, in- cluding ownership of significant real estate
assets. This portfolio does not invest directly in real estate.
International Equity Fund - Invested principally in shares of the
--------------------------
Aon International Equity Fund of the Aon Funds. The portfolio
invests primarily in equity and equity-related securities of
companies that are organized outside the United States or whose
securities are principally traded outside the United States.
The Plan's net assets available for plan benefits by investment program
and changes in net assets available for plan benefits by investment
program are set forth on Schedules II and III, respectively, and are
incorporated herein by reference.
Effective January 1, 1998, the Balanced Fund was terminated as planned.
Remaining net assets in the Balanced Fund were transferred to the Money
Market Fund.
- 5 -
<PAGE>
E. Account Balances
Each Participant's account is credited with the Participant's
contribution and an allocation of a) the Company's contribution, b)
Plan earnings, and c) Forfeitures of terminated Participants'
non-vested accounts.
Participants are fully vested in their contributions plus actual earnings
thereon. Participants become 100% vested in the remainder of their account
balance after five years of Plan Service, according to a graded schedule.
Forfeitures of non-vested accounts are allocated to the remaining
Participants. The amount of forfeitures allocated to Participants was
$823,000 and $825,000 for 1997 and 1996, respectively.
On termination of service, a participant may elect to receive either a
lump sum amount equal to the value of his or her account and/or monthly
installments over a period not to exceed ten years.
F. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants will become 100% vested in their account
balances.
G. Loan Administration
Under the Plan, Participants do not have the ability to borrow from their
accounts. Prior to certain plan mergers, the predecessor plans permitted
Participants to borrow from the vested portion of their account. At the
date of merger, Participants under the former plans could no longer borrow
from the vested portion of their account. However, the Plan will continue
to administer those loans that existed prior to the mergers.
H. Summary Plan Description
Participants of the Plan should refer to the Summary Plan Description for
a more complete description of the Plan.
2. Summary of Significant Accounting Policies
------------------------------------------
A. Investments
Investments, except for unallocated guaranteed insurance contracts, are
carried at fair value, which for marketable securities is based on
quotations obtained from national securities exchanges and various other
sources. Investments in unallocated guaranteed insurance contracts are
valued at contract value, which represents contributions made under the
contract, plus interest at the contract rate, less any administrative
charges. The Plan believes contract value approximates fair value.
Interest income is recorded as earned. Dividend income is recorded on the
ex-dividend date. Realized gains or losses on investments are the
difference between the proceeds received and the cost of investments sold
as determined on a first-in, first-out basis. The change in the difference
between fair value and the cost of investments is reported as unrealized
appreciation or depreciation of investments.
- 6 -
<PAGE>
B. Operating Expenses
Administrative expenses of the Plan, including expenses of the Trustees,
are paid from the Plan assets, except to the extent that the Company at
its discretion, may decide to pay such expenses. Administrative expenses
include $860,000 and $830,000 in 1997 and 1996, respectively, paid to
subsidiaries of the Company.
C. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles re- management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
3. Investments
-----------
The Northern Trust Company is the custodian of the Plan assets and Trustee
for the Aon Stock Fund. The remaining Trustees for the Plan are members of
the Company's Investment Department, and they have been given the
discretion and authority to manage the investments. The Trustees are named
fiduciaries under ERISA.
The net realized and unrealized appreciation (depreciation) in fair value
of Plan investments is as follows:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
(thousands)
<S> <C> <C>
United States Government and
Government Agency Issues $ 96 $ (1,305)
Corporate Bonds and Notes (179) (308)
Other Bonds (13) (24)
Common Stock:
Aon Corporation 118,016 58,485
Other 10,871 10,012
Preferred Stocks 335 502
Investment held in the Aon Funds:
Aon Money Market Fund -- --
Aon Government Securities Fund 559 (148)
Aon Asset Allocation Fund 15,437 982
Aon S&P 500 Index Fund 23,751 (649)
Aon REIT Index Fund 1,935 498
Aon International Equity Fund 143 177
Investment held in the Life of Virginia Series Funds:
Money Market Portfolio -- 1,249
Government Securities Portfolio -- 155
Total Return Portfolio -- 4,028
Common Stock Index Portfolio -- 12,324
Real Estate Securities Portfolio -- 697
International Equity Portfolio -- 230
Unallocated Guaranteed
Insurance Contracts 1 2
$ 170,952 $ 86,907
========= =========
</TABLE>
The aggregate cost of investments was $536,739,000 and $508,809,000 at
December 31, 1997 and 1996, respectively.
- 7 -
<PAGE>
The following investments exceed 5% of the Plan's net assets available for
plan benefits:
December 31
---------------------
(thousands) 1997 1996
-------- -------
Aon Corporation, Common Stock $392,871 $292,189
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company 70,779 --
Investments held in the Aon Funds:
Aon Asset Allocation Fund 79,836 51,743
Aon S&P 500 Index Fund 114,739 70,708
U.S. Treasury Bills due 1-2-97 -- 44,000
The Plan has an unallocated guaranteed insurance contract with a contract
value of $5,077,000 that is issued by an insurance subsidiary of the
Company.
The average yield on all other guaranteed investment contracts is equal to
the stated interest rate of the particular contract.
4. Federal Income Taxes
--------------------
The Plan received a favorable determination letter on April 10, 1995. The
Plan is required to operate in conformity with the Code to maintain its
qualification. The Plan Administrative Committee believes the Plan is a
qualified salary reduction plan under Section 401(k) of the Code. The
Plan's Administrative Committee is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status.
5. Subsequent Events
-----------------
In early 1997, Aon Corporation acquired Alexander and Alexander Services
Inc. The Thrift Plan for Employees of Alexander and Alexander Services
Inc. was merged with the Aon Savings Plan effective January 1, 1998.
Accordingly, net assets available for plan benefits of approximately $269
million were transferred to the Plan effective January 1, 1998.
6. Year 2000 Issue (unaudited)
---------------------------
The Company has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical
data processing systems. The project also includes determining whether
third party service providers have reasonable plans in place to become
year 2000 compliant. The Company currently expects the project to be
substantially complete by mid 1999. The Company does not expect this
project to have a significant effect on plan operations.
- 8 -
<PAGE>
Schedule I
AON SAVINGS PLAN
ASSETS HELD FOR INVESTMENT
December 31, 1997
Schedule I represents the investments of the Aon Savings Plan. The investments
are allocated to the various investment funds in which the Plan's Participants
may elect to invest their funds. Schedule II, following on page 13, represents
the composition of these investment funds for the Aon Savings Plan.
<TABLE>
<CAPTION>
Number of Shares Cost Fair Value
----------------
Issue Principal Amount (thousands) (thousands)
- - - - - - - - - - - - - - - - - -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Fund
- - - - - - - - - - - - - - - - - -----------------
Mutual Fund
Investments held in the Aon Funds
Money Market Fund 29,678,360 $ 29,678 $ 29,678
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 95,290 95 95
----------- -----------
Total Money Market Fund $ 29,773 $ 29,773
=========== ===========
Balanced Fund
- - - - - - - - - - - - - - - - - -------------
Common Stock
Security Capital Group, Inc.
Class B Warrant 2,198 $ -- $ 12
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 64,366,442 $ 64,366 $ 64,366
----------- -----------
Total Balanced Fund $ 64,366 $ 64,378
=========== ===========
Aon Stock Fund
- - - - - - - - - - - - - - - - - --------------
Common Stock
Aon Corporation
Common Stock, $1.00 par 6,701,423 $ 126,163 $ 392,871
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 420,862 $ 421 $ 421
----------- -----------
Total Aon Stock Fund $ 126,584 $ 393,292
=========== ===========
- 9 -
<PAGE>
Number of Shares Cost Fair Value
----------------
Issue Principal Amount (thousands) (thousands)
- - - - - - - - - - - - - - - - - -------------------------------------------------------------------------------------
Investment Contract Fund
- - - - - - - - - - - - - - - - - ------------------------
Unallocated Insurance Contracts
Combined Insurance Co. of America
Contract #CG1000
7.12% due 9/30/96, 6/30/99 $ 5,076,729 $ 5,077 $ 5,077
Commonwealth Life Insurance Co.
Contract #ADA00551FR
5.35% due 6/30/98 3,064,998 3,065 3,065
The Life Insurance Company of Virginia
Contract #GS2753
5.67% due 9/30/98 12,456,990 12,457 12,457
Protective Life Insurance Company
Contract # GR-9039
7.36% due 3/31/99 5,034,955 5,035 5,035
Provident Life & Accident Insurance Co.
Contract #627-05641
5.79% due 12/31/98 5,254,833 5,255 5,255
Prudential
Contract #6458
5.20% due 6/30/98 6,119,728 6,119 6,119
Sun Life Insurance Co.
Contract #GICFA-484
6.02% due 12/31/98 5,315,763 5,316 5,316
Travelers Insurance Co.
Contract #GR-9039
4%, Reset annually 1,202,353 $ 1,202 $ 1,202
----------- -----------
Total Unallocated Guaranteed Insurance Contracts 43,526 43,526
----------- -----------
U.S. Government and Government
Agency Issues
U.S. Treasury Bill
due 2/15/1998 $ 15,000,000 14,803 14,898
U.S. Treasury Bill
due 2/19/1998 24,000,000 23,790 23,837
U.S. Treasury Bill
due 2/5/1998 16,000,000 15,806 15,923
----------- -----------
54,399 54,658
----------- -----------
Other
Wachovia Real Estate Fund 28 21 14
----------- -----------
21 14
----------- -----------
- 10 -
<PAGE>
Number of Shares Cost Fair Value
----------------
Issue Principal Amount (thousands) (thousands)
- - - - - - - - - - - - - - - - - -------------------------------------------------------------------------------------
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Companany $ 4,914,148 4,914 4,914
----------- -----------
Total Short-Term Investments 4,914 4,914
----------- -----------
Total Investment Contract Fund $ 102,860 $ 103,112
=========== ===========
Government Securities Fund
- - - - - - - - - - - - - - - - - --------------------------
Mutual Fund
Investments held in the Aon Funds
Government Securities Fund 1,589,430 $ 16,344 $ 16,768
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 76,330 76 76
----------- -----------
Total Government Securities Fund $ 16,420 $ 16,844
=========== ===========
Total Return Fund
- - - - - - - - - - - - - - - - - -----------------
Mutual Fund
Investments held in the Aon Funds
Asset Allocation Fund 4,862,145 $ 66,739 $ 79,836
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 139,715 140 140
----------- -----------
Total Total Return Fund $ 66,879 $ 79,976
=========== ===========
Common Stock Index Fund
- - - - - - - - - - - - - - - - - -----------------------
Mutual Fund
Investments held in the Aon Funds
S&P 500 Index Fund 8,001,294 $ 96,182 $ 114,739
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 572,886 573 573
----------- -----------
Total Common Stock Index Fund $ 96,755 $ 115,312
=========== ===========
- 11 -
<PAGE>
Number of Shares Cost Fair Value
----------------
Issue Principal Amount (thousands) (thousands)
- - - - - - - - - - - - - - - - - -------------------------------------------------------------------------------------
Real Estate Securities Fund
- - - - - - - - - - - - - - - - - ---------------------------
Mutual Fund
Investments held in the Aon Funds
REIT Index Fund 1,304,440 $ 15,711 $ 17,923
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 50,682 51 51
----------- -----------
Total Real Estate Securities Fund $ 15,762 $ 17,974
=========== ===========
International Equity Fund
Mutual Fund
Investments held in the Aon Funds
International Equity Fund 1,597,241 $ 17,196 $ 17,234
Short-Term Investments
Short-Term Investment Fund,
Collective Trust Funds of
The Northern Trust Company $ 143,452 143 143
----------- -----------
Total International Equity Fund $ 17,339 $ 17,377
=========== ===========
Total Investments $ 536,738 $ 838,038
=========== ===========
- 12 -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule II
AON SAVINGS PLAN
NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
DECEMBER 31, 1997
(thousands)
Money Aon Investment Government Total
Market Balanced Stock Contracts Securities Return
ASSETS Fund Fund Fund Fund Fund Fund
- - - - - - - - - - - - - - - - - ------ --------- --------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investments, at Fair Value:
United States Government and
Government Agency Securities $ 54,658
Corporate Bonds and Notes -
Other Bonds -
Common Stocks:
Aon Corporation $ 392,871 -
Other $ 12 - -
Preferred Stocks - - -
Investments held in the Aon Funds:
Aon Money Market Fund $ 29,678 - - -
Aon Government Securities Fund - - - - $ 16,768
Aon Asset Allocation Fund - - - - - $ 79,836
Aon S&P 500 Index Fund - - - - - -
Aon REIT Index Fund - - - - - -
Aon International Equity Fund - - - - - -
Other Long-Term Investments - - - 14 - -
Short-Term Investments 95 64,366 421 4,914 76 140
--------- --------- ---------- ---------- ---------- ---------
29,773 64,378 393,292 59,586 16,844 79,976
Unallocated Guaranteed Insurance Contracts,
at Contract Value - - - 43,526 - -
--------- --------- ---------- ---------- ---------- ---------
Total Investments 29,773 64,378 393,292 103,112 16,844 79,976
Receivables:
Contribution Receivable from Aon Corporation 794 - 5,327 1,581 756 1,701
Contributions Receivable from Participants 28 (2) 162 45 20 57
Loans Receivable - - - - - -
Accrued Dividends and Income 1 213 3 38 1 2
Due from Broker - 1,265 925 14,113 - -
Fund Transfers (717) 286 418 3 18 152
--------- --------- ---------- ---------- ---------- ---------
Total Receivables 106 1,762 6,835 15,780 795 1,912
--------- --------- ---------- ---------- ---------- ---------
Net Assets Available for Plan Benefits $ 29,879 $ 66,140 $ 400,127 $ 118,892 $ 17,639 $ 81,888
========= ========= ========== ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Schedule II
AON SAVINGS PLAN
NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
DECEMBER 31, 1997
(CONTINUED)
(thousands)
Common Real Estate International
Stock Index Securities Equity Loan
ASSETS Fund Fund Fund Account Total
--------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investments, at Fair Value:
United States Government and
Government Agency Securities $ 54,658
Corporate Bonds and Notes -
Other Bonds -
Common Stocks:
Aon Corporation 392,871
Other 12
Preferred Stocks -
Investments held in the Aon Funds:
Aon Money Market Fund 29,678
Aon Government Securities Fund 16,768
Aon Asset Allocation Fund 79,836
Aon S&P 500 Index Fund $ 114,739 114,739
Aon REIT Index Fund - $ 17,923 17,923
Aon International Equity Fund - - $ 17,234 17,234
Other Long-Term Investments - - - 14
Short-Term Investments 573 51 143 70,779
--------- --------- ---------- ---------- ----------
115,312 17,974 17,377 794,512
Unallocated Guaranteed Insurance Contracts,
at Contract Value - 43,526
--------- --------- ---------- ---------- ----------
Total Investments 115,312 17,974 17,377 838,038
Receivables:
Contribution Receivable from Aon Corporation 3,439 507 649 14,754
Contributions Receivable from Participants 121 21 27 479
Loans Receivable - - - $ 581 581
Accrued Dividends and Income 2 - - - 260
Due from Broker - - - - 16,303
Fund Transfers (414) 103 151 - -
--------- --------- ---------- ---------- ----------
Total Receivables 3,148 631 827 581 32,377
--------- --------- ---------- ---------- ----------
Net Assets Available for Plan Benefits $ 118,460 $ 18,605 $ 18,204 $ 581 $ 870,415
========= ========= ========== ========== ==========
</TABLE>
- 13 -
<PAGE>
<TABLE>
<CAPTION>
Schedule II
AON SAVINGS PLAN
NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
DECEMBER 31, 1996
(thousands)
Money Aon Investment Government Total
Market Balanced Stock Contracts Securities Return
ASSETS Fund Fund Fund Fund Fund Fund
- - - - - - - - - - - - - - - - - ------ --------- --------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investments, at Fair Value:
United States Government and
Government Agency Securities $ 38,043 $ 44,000
Corporate Bonds and Notes 6,312 -
Other Bonds 1,028 -
Common Stocks:
Aon Corporation - $ 292,189 -
Other 44,202 - -
Preferred Stocks 1,616 - -
Investments held in the Aon Funds:
Aon Money Market Fund $ 25,754 - - -
Aon Government Securities Fund - - - - $ 12,526
Aon Asset Allocation Fund - - - - - $ 51,743
Aon S&P 500 Index Fund - - - - - -
Aon REIT Index Fund - - - - - -
Aon International Equity Fund - - - - - -
Other Long-Term Investments - - - 16 - -
Short-Term Investments 106 4,183 475 5,015 176 422
--------- --------- ---------- ---------- ---------- ---------
25,860 95,384 292,664 49,031 12,702 52,165
Unallocated Guaranteed Insurance Contracts,
at Contract Value - - - 79,198 - -
--------- --------- ---------- ---------- ---------- ---------
Total Investments 25,860 95,384 292,664 128,229 12,702 52,165
Receivables:
Contribution Receivable from Aon Corporation 776 - 4,712 1,880 955 1,569
Contributions Receivable from Participants 18 (38) 60 49 1 52
Loans Receivable - - - - - -
Accrued Dividends and Income 1 791 2 26 1 1
Due from Broker - (398) 2,750 - 75 550
Fund Transfers (386) (85) 60 56 41 73
--------- --------- ---------- ---------- ---------- ---------
Total Receivables 409 270 7,584 2,011 1,073 2,245
--------- --------- ---------- ---------- ---------- ---------
Net Assets Available for Plan Benefits $ 26,269 $ 95,654 $ 300,248 $ 130,240 $ 13,775 $ 54,410
========= ========= ========== ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Schedule II
AON SAVINGS PLAN
NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
DECEMBER 31, 1996
(CONTINUED)
(thousands)
Common Real Estate International
Stock Index Securities Equity Loan
ASSETS Fund Fund Fund Account Total
--------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investments, at Fair Value:
United States Government and
Government Agency Securities $ 82,043
Corporate Bonds and Notes 6,312
Other Bonds 1,028
Common Stocks:
Aon Corporation 292,189
Other 44,202
Preferred Stocks 1,616
Investments held in the Aon Funds:
Aon Money Market Fund 25,754
Aon Government Securities Fund 12,526
Aon Asset Allocation Fund 51,743
Aon S&P 500 Index Fund $ 70,708 70,708
Aon REIT Index Fund - 5,591 $ 5,591
Aon International Equity Fund - - $ 11,866 11,866
Other Long-Term Investments - - - 16
Short-Term Investments 456 48 219 11,100
------------------------------------ ---------- ----------
71,164 5,639 12,085 616,694
Unallocated Guaranteed Insurance Contracts,
at Contract Value - 79,198
--------- --------- ---------- ---------- ----------
Total Investments 71,164 5,639 12,085 695,892
Receivables:
Contribution Receivable from Aon Corporation 2,925 155 424 13,396
Contributions Receivable from Participants 125 5 17 289
Loans Receivable - - - $ 206 206
Accrued Dividends and Income 1 - 1 - 824
Due from Broker - - - - 2,977
Fund Transfers 167 34 40 - -
--------- --------- ---------- ---------- ----------
Total Receivables 3,218 194 482 206 17,692
--------- --------- ---------- ---------- ----------
Net Assets Available for Plan Benefits $ 74,382 $ 5,833 $ 12,567 $ 206 $ 713,584
========= ========= ========== ========== ==========
</TABLE>
- 14 -
<PAGE>
<TABLE>
<CAPTION>
Schedule III
AON SAVINGS PLAN
CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
YEAR ENDED DECEMBER 31, 1997
(thousands)
Money Aon Investment Government Total
Market Balanced Stock Contracts Securities Return
ADDITIONS Fund Fund Fund Fund Fund Fund
- - - - - - - - - - - - - - - - - --------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest and Income from
Unallocated Guaranteed
Insurance Contracts $ 12 $ 2,349 $ 55 $ 7,533 $ 8 $ 15
Aon Corporation Dividends - - 7,057 - - -
Other Dividends 1,600 1,007 - - 833 1,281
--------- -------- -------- -------- -------- --------
1,612 3,356 7,112 7,533 841 1,296
Contributions:
Aon Corporation 794 - 5,327 1,581 756 1,701
ESOP Diversification 5 - 76 124 13 29
Participants 2,585 - 13,063 3,609 1,932 4,592
--------- -------- -------- -------- -------- --------
3,384 - 18,466 5,314 2,701 6,322
--------- -------- -------- -------- -------- --------
4,996 3,356 25,578 12,847 3,542 7,618
DEDUCTIONS
Benefits Paid to Participants 9,129 13,778 32,525 16,597 2,131 6,023
Administrative Expenses 33 99 373 139 16 69
Investment Expenses 9 36 46 65 9 9
--------- -------- -------- -------- -------- --------
9,171 13,913 32,944 16,801 2,156 6,101
--------- -------- -------- -------- -------- --------
(4,175) (10,557) (7,366) (3,954) 1,386 1,517
Net Realized and Unrealized
Appreciation
in Fair Value of Investments - 11,026 118,016 85 559 15,437
--------- -------- -------- -------- -------- --------
Net Increases (Decreases) (4,175) 469 110,650 (3,869) 1,945 16,954
Net Assets Available for Plan
Benefits at Beginning of Year 26,269 95,654 300,248 130,240 13,775 54,410
Plan Mergers - - - - - -
Fund Transfers 7,785 (29,983) (10,771) (7,479) 1,919 10,524
--------- -------- -------- -------- -------- --------
Net Assets Available for
Plan Benefits
at End of Year $ 29,879 $ 66,140 $400,127 $118,892 $ 17,639 $ 81,888
========= ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Schedule III
AON SAVINGS PLAN
CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
YEAR ENDED DECEMBER 31, 1997
(CONTINUED)
(thousands)
Common Real Estate International
Stock Index Securities Equity Loan
ADDITIONS Fund Fund Fund Account Total
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest and Income from
Unallocated Guaranteed
Insurance Contracts $ 28 $ 6 $ 7 $ 10,013
Aon Corporation Dividends - - - 7,057
Other Dividends 1,730 572 651 7,674
--------- -------- -------- -------- --------
1,758 578 658 24,744
Contributions:
Aon Corporation 3,439 507 649 14,754
ESOP Diversification 31 3 5 286
Participants 9,119 1,841 2,021 38,762
--------- -------- -------- -------- --------
12,589 2,351 2,675 53,802
--------- -------- -------- -------- --------
14,347 2,929 3,333 78,546
DEDUCTIONS
Benefits Paid to Participants 8,346 1,590 1,863 91,982
Administrative Expenses 102 13 17 861
Investment Expenses 9 8 8 199
--------- -------- -------- -------- --------
8,457 1,611 1,888 93,042
--------- -------- -------- -------- --------
5,890 1,318 1,445 (14,496)
Net Realized and Unrealized
Appreciation
in Fair Value of Investments 23,751 1,935 143 170,952
--------- -------- -------- -------- --------
Net Increases (Decreases) 29,641 3,253 1,588 156,456
Net Assets Available for Plan
Benefits at Beginning of Year 74,382 5,833 12,567 $ 206 713,584
Plan Mergers - - - 375 375
Fund Transfers 14,437 9,519 4,049 - -
--------- -------- -------- -------- --------
Net Assets Available for
Plan Benefits
at End of Year $ 118,460 $ 18,605 $ 18,204 $ 581 $870,415
========= ======== ======== ======== ========
</TABLE>
- 15 -
<PAGE>
<TABLE>
<CAPTION>
Schedule III
AON SAVINGS PLAN
CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
YEAR ENDED DECEMBER 31, 1996
(thousands)
Money Aon Investment Government Total
Market Balanced Stock Contracts Securities Return
ADDITIONS Fund Fund Fund Fund Fund Fund
- - - - - - - - - - - - - - - - - ---------
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest and Income from
Unallocated Guaranteed
Insurance Contracts $ 11 $ 3,364 $ 71 $ 7,446 $ 8 $ 16
Aon Corporation Dividends - - 6,909 - - -
Other Dividends 124 1,196 - - 51 120
--------- -------- -------- -------- -------- --------
135 4,560 6,980 7,446 59 136
Contributions:
Aon Corporation 813 - 4,967 1,987 996 1,645
ESOP Diversification 1 - 20 32 2 10
Participants 1,778 - 11,247 4,415 2,169 4,068
--------- -------- -------- -------- -------- --------
2,592 0 16,234 6,434 3,167 5,723
--------- -------- -------- -------- -------- --------
2,727 4,560 23,214 13,880 3,226 5,859
DEDUCTIONS
Benefits Paid to Participants 8,038 10,146 24,818 21,275 1,641 4,464
Administrative Expenses 33 127 328 180 16 64
Investment Expenses 9 38 43 68 9 9
--------- -------- -------- -------- -------- --------
8,080 10,311 25,189 21,523 1,666 4,537
--------- -------- -------- -------- -------- --------
(5,353) (5,751) (1,975) (7,643) 1,560 1,322
Net Realized and Unrealized
Appreciation
in Fair Value of Investments 1,250 8,705 58,485 174 7 5,009
--------- -------- -------- -------- -------- --------
Net Increases (Decreases) (4,103) 2,954 56,510 (7,469) 1,567 6,331
Net Assets Available for Plan
Benefits at Beginning of Year 25,111 105,540 248,718 152,936 13,159 45,494
Fund Transfers 5,261 (12,840) (4,980) (15,227) (951) 2,585
--------- -------- -------- -------- -------- --------
Net Assets Available for
Plan Benefits
at End of Year $ 26,269 $ 95,654 $300,248 $130,240 $ 13,775 $ 54,410
========= ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Schedule III
AON SAVINGS PLAN
CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT PROGRAM
YEAR ENDED DECEMBER 31, 1996
(CONTINUED)
(thousands)
Common Real Estate International
Stock Index Securities Equity Loan
ADDITIONS Fund Fund Fund Account Total
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest and Income from
Unallocated Guaranteed
Insurance Contracts $ 24 $ 2 $ 5 $ 10,947
Aon Corporation Dividends - - - 6,909
Other Dividends 104 68 16 1,679
--------- -------- -------- -------- --------
128 70 21 19,535
Contributions:
Aon Corporation 3,049 162 437 14,056
ESOP Diversification 10 3 9 87
Participants 6,886 302 875 31,740
--------- -------- -------- -------- --------
9,945 467 1,321 45,883
--------- -------- -------- -------- --------
10,073 537 1,342 65,418
DEDUCTIONS
Benefits Paid to Participants 5,443 372 725 $ 7 76,929
Administrative Expenses 71 4 9 - 832
Investment Expenses 9 8 8 - 201
--------- -------- -------- -------- --------
5,523 384 742 7 77,962
--------- -------- -------- -------- --------
4,550 153 600 (7) (12,544)
Net Realized and Unrealized
Appreciation
in Fair Value of Investments 11,675 1,195 407 - 86,907
--------- -------- -------- -------- --------
Net Increases (Decreases) 16,225 1,348 1,007 (7) 74,363
Net Assets Available for Plan
Benefits at Beginning of Year 43,761 1,152 2,952 398 639,221
Fund Transfers 14,396 3,333 8,608 (185) -
--------- -------- -------- -------- --------
Net Assets Available for
Plan Benefits
at End of Year $ 74,382 $ 5,833 $ 12,567 $ 206 $713,584
========= ======== ======== ======== ========
</TABLE>
- 16 -
<PAGE>
Schedule IV
AON SAVINGS PLAN
TRANSACTIONS OR SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF THE CURRENT VALUE OF PLAN ASSETS For the Year Ended
December 31, 1997
The following schedule represents the 5% reportable transactions for the year
ended December 31, 1997 of the Aon Savings Plan. This summary is intended to
satisfy the disclosure requirements set forth in Sections 2520.103-6 of the
Department of Labor Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974.
- 17 -
<PAGE>
<TABLE>
<CAPTION>
Schedule IV
AON SAVINGS PLAN
SCHEDULE OF TRANSACTIONS OR SERIES OF TRANSACTIONS IN
EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
For the Year Ended December 31, 1997
Current Value
Cost of of Asset at Net
(thousands) Asset Transaction Date Gain
----------------- ----------------- -----------------
<S> <C> <C> <C>
Short-Term Investment Fund, Collective
Trust Funds of The Northern Trust Company
$202,410 increases on 689 days $ 202,410 $ 202,410
$142,619 decreases on 374 days 142,619 142,619
$189,807 increases on 194 days 189,807 189,807
$189,919 decreases on 102 days 189,919 189,919
----------------- -----------------
$ 724,755
================= =================
U.S. Treasury Bill due 1-2-97
$43,631 sold in 1 transaction $ 43,631 $ 43,631
U.S. Treasury Bill due 2-4-97
$19,785 purchased in 1 transaction $ 19,785 $ 19,785
$19,785 sold in 1 transaction 19,785 19,785
----------------- -----------------
$ 39,570
================= =================
U.S. Treasury Bill due 4-24-97
$19,739 purchased in 1 transaction $ 19,739 $ 19,739
$19,739 sold in 1 transaction 19,739 19,739
================= =================
$ 39,478
================= =================
U.S. Treasury Bill due 9-18-97
$24,725 purchased in 2 transactions $ 24,725 $ 24,725
$24,725 sold in 1 transaction 24,725 24,725
================= =================
$ 49,450
================= =================
U.S. Treasury Bill due 10-23-97
$19,745 purchased in 1 transaction $ 19,745 $ 19,745
$19,745 sold in 1 transaction 19,745 19,745
================= =================
$ 39,490
================= =================
U.S. Treasury Bill due11-15-97
$36,714 purchased in 4 transactions $ 36,714 $ 36,714 $ -
$36,714 sold in 1 transaction 36,714 37,200 486
================= =================
$ 73,914 $ 486
================= =================
U.S. Treasury Bill due12-18-97
$24,689 purchased in 1 transaction $ 24,689 $ 24,689
$24,689 sold in 1 transaction 24,689 24,689
================= =================
$ 49,378
================= =================
</TABLE>
- 18 -
<PAGE>
Exhibit 23(a)
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8, No. 33-27894) pertaining to the Aon Savings Plan of Aon Corporation of our
report dated June 12, 1998, with respect to the financial statements and
schedules of the Aon Savings Plan included in this Annual Report (Form 11-K) for
the year ended December 31, 1997.
ERNST & YOUNG LLP
Chicago, Illinois
June 24, 1998
- 19 -
<PAGE>
June 26, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: REPORT ON FORM 11-K FOR THE AON SAVINGS PLAN
REGISTRANT: AON CORPORATION
COMMISSION FILE NO.: 1-7933
Gentlemen and Ladies:
Enclosed with this EDGAR transmission is the above referenced Form 11-K
for the Aon Savings Plan.
Pursuant to Securities Act Release No. 33-7331, no filing fee is being
paid herewith as it was eliminated effective October 7, 1996.
Please contact the undersigned at 312/701-3835 if you have any questions.
Very truly yours,
/S/ JEROME S. HANNER
Jerome S. Hanner
Senior Counsel
JSH/adc
Enclosures
