Pension trustees 'should be aware of security levels on schemes'

Pension scheme trustees need to understand what security is provided for their schemes by the sponsoring employer, it has been suggested.

Jonathon Land, Partner at PricewaterhouseCoopers (PwC), said that Pension Protection Fund benefits can be notably lower than what people expect and trustees should therefore get to grips with what security is in place.

This is particularly the case for trustees in the construction, manufacturing and retail industries, which have large numbers of scheme members and have suffered badly because of the recession, Mr Land commented.

"In addition to the reported insolvencies, many other businesses are restructuring and, as one of the largest unsecured creditors in many companies, the pension plan must form an important part of these discussions," he added.

His comments came after PwC research showed that 5,483 organisations became insolvent in the first three months of this year - a 14% rise from the quarter before.

Peter Vipond, the ABI's Director of Financial Regulation, said earlier this month that trustees and corporate sponsors have never had to deal with such a difficult economic environment.