On the go: The Association of Professional Pension Trustees has written to the Institute of Chartered Accountants in England and Wales to express membership concerns about the amount of time and resource required to respond to enquiries about pension schemes from the auditors of scheme sponsors.
In its letter to the ICAEW, the APPT states that it welcomes the drive by the Financial Reporting Council to improve quality in the audit of pension disclosures in the financial statements of sponsoring employers.
However, recent experiences of its members have shown requests for information from auditors to have been excessive and inadequately planned.
For instance, the letter highlights that requests for trustee meeting minutes and detail of other governance activities of separate entities to the sponsor are not seen as being necessary for the purpose of auditing balances and disclosures in the sponsor’s financial statements.
Furthermore, the letter states that requests often disregard the relationship between the scheme sponsor and the trustee, its administrators and its investment managers, and also disregard the regulatory requirements of the pension scheme.
The APPT also draws attention to the limits imposed on trustees by the requirements of data protection legislation. While the provision of personal information for legitimate purposes is permitted and information may be anonymised, trustees and their data processors must assess the purpose and consider the amount of information that can legitimately be provided to auditors.
There should also be greater clarity about the roles and responsibilities as the corporate disclosures are not the responsibility of the trustee and their advisers. The provision information may be more reasonably the responsibility of corporate advisers.
Nita Tinn, APPT chair, commented: “These requests are often excessive and seem to disregard both the regulatory framework within which pension schemes operate and the legal relationship between pension schemes and their sponsors. The APPT urges the ICAEW to act so that future information requests are relevant, proportionate and reflect the fact that pension schemes are separate legal entities.”
The ICAEW said it has been made aware of the concerns through its pensions subcommittee and is currently considering what steps might be taken to address these issues.
