Articles, reports and other resources that enable accountants in business to make a real difference to their organisations by providing them with practical information on the latest thinking in pensions.
Workplace pensions reforms: auto-enrolment and compulsory employer contributions.
Wide ranging work-based pension reforms will be phased in from October 2012, aimed at encouraging more people to save for their retirement.
All employers need to start preparing for their new responsibilities under the legislation and should be planning and budgeting at an early stage to prepare for the additional costs - both of any additional employer contributions, and of the additional administrative costs of upgrading payroll systems, collecting and paying over contributions and retaining the required records.
More detailed information on the proposals is available on our Workplace Pensions Reforms page.
Accounting and audit
View advice on pensions accounting and audit published by ICAEW, the Auditing Practices Board (APB) and the Accounting Standards Board (ASB).
Accounting
In November 2009 the Accounting Standards Board (ASB) published its report ‘The Financial Reporting of Pensions: Feedback and Redeliberations’. The objective was to provide the International Accounting Standards Board (IASB) with recommendations on matters it might consider in developing a future financial reporting standard on pensions.
The report was a follow-up to the January 2008 Discussion Paper (DP) ‘The Financial Reporting of Pensions’ and set out the ASB’s redeliberations and recommendations following the comments received during the consultation process.
In April 2010 the IASB published an ED entitled ‘Defined Benefit Plans: Proposed amendments to IAS 19’.
Pensions Research Accountants Group (PRAG) is recognised by the Accounting Standards Board as the appropriate organisation to issue Statements of Recommended Practice (SORPs) entitled ‘Financial Reports of Pension Schemes’. The most recent revision of the SORP is that published in May 2007.
The Pension Protection Fund (PPF) has published guidance on accounting issues for trustees at. Other pages give guidance on specific accounting issues, such as:
Audit
The Auditing Practices Board (APB) issued an updated version of Practice Note 15, 'The Audit of Occupational Pension Schemes in the United Kingdom', in January 2011. The revised Practice Note can be downloaded from the APB’s website.
The Pension Protection Fund has also published ‘Technical Tools’ to obtain a set of audited accounts to support the section 143 valuation.
Working with actuaries – Joint protocol
ICAEW has published guidance prepared by a joint working party of the Faculty and Institute of Actuaries (FIoA) and ICAEW, TECH 02/08 entitled ‘Actuaries’ and Auditors’ Inter-professional Communications - Pensions and other post-retirement benefits’.
The guidance is designed as a practical tool for actuaries and auditors to use when communicating with each other in the context of accounting requirements for retirement benefits in employer accounts and pension scheme financial statements.
Confidentiality Agreements
A number of our member firms that audit pension schemes have received requests from pension scheme administrators asking the firm to sign a confidentiality agreement. It is the view of the ICAEW’s pensions sub-committee that firms should not sign such agreements for the following reasons:
- The Occupational Pension Schemes (Scheme Administration) Regulations 1996 make it clear that the scheme’s trustees are responsible for making available to the scheme auditor all the scheme’s accounting records and all other records and related information. Auditors thus have a statutory right to information for the purpose of the audit and this is not subject to any restrictions; and
- ISA (UK and Ireland) 200, paragraph 14, requires the auditor to comply with relevant ethical requirements in the conduct of their work. The explanatory material in A15 includes confidentiality among the ethical principles set out in Part A of the IFAC Code of Ethics for Professional Accountants. Further, the ethical standards issued by the UK’s Auditing Practices Board, which apply to the audit of financial statements, in particular, ES1 ‘Integrity, objectivity and independence’, require auditors to treat as confidential information obtained during an audit (paragraph 9).
The pensions regulator
The Pensions Regulator (TPR) was established by the Pensions Act 2004 and took over from the previous regulator, the Occupational Pensions Regulatory Authority, on 6 April 2005.
TPR aims to raise standards of record keeping in preparation for automatic enrolment of staff from 2012, focusing in particular on risks faced by DC schemes which will be the vehicle into which most new members will be auto-enrolled.
Further information
The current market conditions present particular considerations for trustees and auditors in relation to pension scheme accounts (October 2008).
The topic of pensions is regularly hitting the headlines. As finance professionals, we are often expected to have all of the answers. Within this special report we provide you with a review of some of the key pensions-related issues, from the perspective of some of the leading people in each area of expertise.
The Pensions Regulator's views on when pension scheme auditors should 'blow the whistle' in the new regulatory environment
Assurance reports on internal controls of service organisations made available to third parties (Appendix 1 expanded June 2009) (Appendix 8 introduced October 2010).