Insolvencies in England and Wales still remain at "unprecedented levels" and pension fund trustees must remain vigilant by monitoring their employer covenant and finding ways to improve their scheme's position, says Jonathan Land, partner and pensions credit advisory leader, PricewaterhouseCoopers (PwC).

The Insolvency Service has released statistics illustrating that the third quarter of 2009 saw a 7.2 per cent decrease in combined national corporate insolvencies since Q2 2009, although this is still an 11 per cent increase on the same quarter last year and represents a ten year high. These figures will continue to be of interest to the Pension Protection Fund (PPF), which yesterday published its annual report revealing its £1.2bn deficit. The lifeboat fund could be put under further strain if there were to be a sudden increase in insolvencies resulting in a tidal wave of members transferring over to the PPF.

Land explained that while the UK is finally seeing a tail off to the huge numbers of insolvencies this recession has brought, the number of insolvencies reported last quarter still remain at significantly high levels. "There is often a spike in the number of companies failing as economies recover, "Land warned, "because some businesses take their eye off cash control - pension scheme trustees must continue to monitor the strength of their employer and actively pursue ways to optimise their schemes' positions."

"The utilities sector may be an area to come under pressure. Some companies in this industry have historically pushed for long recovery periods - shorter recovery periods, higher leverage within the industry and push back on passing costs onto consumers may result in greater competition for cash in the longer term."

According to the statistics, a total of 6,114 businesses across England and Wales entered insolvency in Q3 2009.

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