Pensions professionals call on the UK government to streamline pension scheme annual reports
The Joint Industry Forum on Workplace Pensions (JIF) has written to the Department for Work and Pensions (DWP) calling for the UK government to repeal or amend the regulations which set out pension scheme annual report requirements.
The problem with regulatory information in annual reports
The letter highlights that pension scheme annual reports and accounts have become very long and, in some cases, longer than annual reports and accounts prepared by large corporates. This makes them costly to produce and of little value to members. Much of the information included in annual reports must also be published elsewhere resulting in duplication that diminishes the value of the audited accounts.
Pension scheme annual reports have become a repository source for additional regulatory information including:
Annual governance statements for defined contribution (DC) occupational pension schemes (sometimes referred to as a DC Chair’s Statement).
Engagement policy implementation statements, on engagement and voting behaviour, covering defined contribution and defined benefit occupational pension scheme arrangements.
Climate change governance reports which is included in the annual report or as a link within the annual report to where it can be found on a publicly available website.
The case for reform
The JIF calls for regulatory information to be de-coupled from the annual report and accounts document so that it is more likely to provide relevant information to members. The letter also highlights that this would help to streamline the production of audited pension scheme accounts without impacting on the preparation of compliant regulatory information which is prepared by scheme advisers and reviewed by others, including scheme trustees and scheme legal advisers.
At the time of writing there is no information in the public domain relating to any official response to the letter from the DWP.
About the Joint Industry Forum
The JIF comprises the Association of Consulting Actuaries, the Association of Pension Lawyers, the Association of Professional Pension Trustees, the Institute and Faculty of Actuaries, ICAEW, the Investment Association, the Pensions Administration Standards Association, the Pensions and Lifetime Savings Association, The Pensions Research Accountants Group (PRAG) and the Society of Pension Professionals.
The ICAS view
ICAS is a member of PRAG and our position on reforming reporting by pension schemes is as follows:
We would like to see a review of the annual reporting requirements placed on pension schemes by the DWP which considers the separation of governance and investment information solely relevant to The Pensions Regulator from the annual reports of pension schemes. Consideration should be given to the relevance of information currently prepared to ensure it meets the needs of its intended audience and that the cost of producing information, including audit and adviser fees, does not outweigh its value. Related regulations should be reviewed and updated to ensure that the reporting requirements are clear in order to avoid undue complexity resulting in a tick box approach to compliance.
Read the JIF’s letter to the DWP.
Categories:
- Pensions
- Corporate & financial reporting
