Credit crunch has created unprecedented buyout opportunities

The credit crunch has driven up market demand for insured buyouts and The Pensions Regulator’s insistence that schemes not be used as cash injections for non-insured companies has further increased their popularity.

Aon emphasised that despite volatile markets and falling equity prices most pension schemes had survived the credit crunch so far due to the structure of long-term investment strategies.

Aon Consulting investment consultant and actuary Daniel Peters said the firm was not advising its pension scheme clients to withdraw its portfolios from equities.

"The important question is, what is your timeframe? Pension schemes are not overly concerned with short-term volatility. So there is not a direct need to diversify. But the answer really depends on the company and its liabilities," he said.

Aon Consulting investment principal Chris Erwin added that trustees needed to assess funds according to their long-term liabilities and what level of investment risk was needed to meet these responsibilities.